Post-Acquisition Interview with Auto-IT: A Journey of Growth, Strategic Sale, and a Promising Future

The Perseus integration team recently traveled to Auto-IT’s offices in Melbourne to kick off our integration process. While on site, we sat down with Auto-IT's CEO, Wayne Rushworth, and Director of Sales and Marketing, Aaran Newman, and a several other team members to discuss the journey of Auto IT from its inception to its recent acquisition.

They share insights into the company's growth, the decision-making process behind selling the business, and their experiences post-acquisition. This conversation provides a comprehensive look at the strategic moves that led to Auto IT's success and their optimistic outlook for the future under new ownership.

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Read the Full Interview Below

Aaran, tell me more about the history of auto IT, the markets you serve, how it all came about?

Yeah, so auto IT was the formation of two companies, information services and KG Management back in 2000. At that point, we were already in automotive, Ag, Truck and a little bit of Construction.

And the aim was to grow that business. We've continued to grow in automotive very strongly. We're the second biggest player in automotive in the region of Europe. But also in that time, we've been trucking. So we picked up some of the biggest dealerships in the trucking industry within Australia. We're now number one in trucking, which is fantastic. We're obviously number one in Ag. We work with not just John Deere, but Case New Holland, Agco, Kubota, Kebelco, etc. And yeah, we continue to expand on that. So yeah, look, Auto-IT's had fantastic growth. It's been a fantastic business and looking forward to the next chapter. We operate in a ballpark of about 22 countries. We're up about 430 plus customer groups and about 210-220 active DMS customers in Australia and New Zealand. And our definition of that is you might have one key customer that's got multiple locations and rooftops. We classify that as one customer.

Please give me a sense of how you went about exploring the initial decision to sell the business?

Yeah, so we have six shareholders in our group. The guys were looking for a return on their investment. And that made it a bit difficult to run the business in terms of making sure we resourced appropriately. We reinvested back into our products because you've got to balance the two demands. Not that our shareholder group were unkind by any means of the imagination, but you balance up return versus what you reinvest. And it got to a point where our guys were looking at their own affairs in business. They'd been in business a long time. They'd invested in our business quite some time. And I think it was fair and reasonable for those guys to pursue an exit.

I must admit initially, we weren't exploring 100% divestment. We were only running at maybe a 25, 50 at the max divestment. But as a doubt, I think you gave a pretty good pitch at one stage around the 100% acquisition. And we looked at it and thought, well, maybe this is for everybody.

Wayne, how did you ultimately decide to pick Constellation and Perseus over the other bids that you had during this process?

We basically got a lot more demand than what we thought was out there. So we culled a list down and we came down with two potential acquirers, you guys being one. I think there was synergy with our group and yours. I think there was a good cultural fit. You guys seemed very personable, you knew the business.

I'd known Daniel for a long time and I knew what he was like to deal with. And I think, you know, I look at the culture that we have versus the business that you've had. And I think that was a key factor to it.

That's great. And just since we've made the investment, there are so many similarities that we see with Auto-IT and the other portfolio companies that I think the process from here is going to be outstanding.

What you said that your offer and the perimeter's perimeter offer didn't really deviate. And that was important for us. I think the pitch that you guys have put up in terms of, you're not like a typical private equity group that comes in. It's a short horizon. Put up the prices, cut the costs and accept in three to five years. That's not your style or mantra, right? It's about a long term hold. And I think it was important for us to make sure for our customers and also for our staff that they saw a future that was going to go beyond a future that they may have with a private equity crowd. That they're looking for a long term career stability.

Obviously price comes into it like any seller. But also we wanted to work with a company that we could trust and sell to a company that we could trust. Perseus were always very solid, very consistent throughout the process. Perseus also have experience in the DMS industry throughout the UK and North America. And Perseus, when they buy they never sell.

So for us, we saw it as a win-win situation. A win for the company because it was going to be able to leverage the experience of Perseus and grow strongly. A win for our staff because now they've got potentially more opportunities, not just within Auto-IT but within other Perseus and Constellation businesses. And a huge win for our clients because we see now that we can leverage off the expertise, more expertise or greater expertise than we currently have throughout the Perseus group. As well as perhaps some of the other products and services that Perseus have.

What advice would you give another owner that's contemplating selling their business?

I think for me, you've got to be prepared to go through the process. It can be a pretty hard process because you've got a business to run and you've got side play happening on the other side, which is equally as important. So your work effort is going to go, it's going to be a little tough. But if you're committed to going through that process and now everyone will have their own reasons for it, I think the key thing is to find a party that is going to be consistent, they're going to be fair and equitable, even handed, and they're going to stick to what they say. I think that's important.

A founder has created a business over a long period of time. They've got a lot of their life invested in their product. And I think it's important that they find the right home for their business to preserve that legacy that's they've created. And I think that's important.

Yeah, I think being an owner, one of the things that concerns you is that you're opening yourself up to potential purchasers and you're giving them a lot of information about what your business does. I think one of the things working with Perseus is we felt comfortable.

We felt as though Perseus was honest and transparent. You guys were consistent through the process and solid. You know, I think being definitely being prepared for an owner is really important before going through the process. And we were quite prepared. But it was always, you know, very accommodating in the discussions. And even if we didn't have the information there and then, it was fine. Just come back to us when you can, give us the information and we'll move forward from there. So, you know, we found the process quite good in that regard. And hence here we are today, now part of the Perseus group.

What excites you the most about the next chapter of the business under the Constellation Dealer Group?

I think the thing that excites me the most would be being part of a much larger organisation. We're essentially a small-medium, and a bit in-house in Australia. I think to me that would be the most exciting thing about taking our footprint to a much larger level.

We have a major competitor in this market and I think they're on notice. And I think that's a really good thing. Looking forward to it. We've only been part of the Perseus group for a few weeks now and the response rate has been fantastic. The advice has been very good. So I think that's been great. We've also already started talking to a couple of other DMS companies in America and the UK about some of the products and services they have, but also about what we might be able to offer them.And they've been very responsive as well. So I can see already that the culture within the group is very accommodating, very responsive, and willing to help each other. So I really like that.

I'm really excited about being introduced to a multinational global company. Not only obviously for the career paths that it might give me, but also really excited about what it will give me in terms of access to other people's experiences and best practices throughout the industry.

For me, opening doors to training, to better HR management, to better HR systems for our people, but better training for our users and more involvement and investment in the users, which as a smaller business can be really hard to make happen over time.

So the possibilities are fantastic and the resources of Perseus really give us great opportunities into the future. It is exciting to have the extra support with more resources, opportunity to enter different business markets around the world where Perseus and Constellation already are, that we might not already be, and having that opportunity to expand the experiences for everyone.

Opportunities is what I'm most looking forward to, so opening up other doors that can lead me into other areas. I would hope the leveraging of the knowledge base that comes with Perseus would be awesome for our group at Auto IT. So we have that benefit of the resources to be able to develop and compete even in a bigger way against our biggest competitor.

Probably the biggest excitement is the sheer resources that hope for Perseus will be able to allow us to utilise, to come with so much other DMSs and knowledge there. So to be able to hopefully share that knowledge around will be fantastic, I reckon, for us.