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ARP OVERVIEW

| DC | Miami | AutomotiveResourcePartners.com


Table of Contents •   •   •   •   •  

Executive Summary Industry Overview Automotive Landscape Financial and Preliminary Valuation Process Overview


Executive Summary •  

Automotive Resource Partners is a group of the leading technology and services companies

•  

Automotive Resource Partners comprehensive suite consists of Advertising Agencies, Digital Marketing Services, Targeted Marketing, and Mobile Marketing Systems

•  

Automotive Resource Partners helps OEM’s, Advertising Associations and Retailers attract more traffic while reducing their advertising expense

•  

Automotive Resource Partners helps clients increase their closing ratio, profits, customer satisfaction, customer loyalty and frequency


Industry Overview

Market Size – Dealership Media / Advertising Large Market:Large Market: 2008 Largest Advertising Category in the U.S. - $22.1 billion

Source: Borrell Associates


Industry Overview

Market Size – Dealership Media / Advertising Transition to Digital Marketing: Transition to Digital Marketing: Over 75% of consumers currently leverage the Internet to aid in the vehicle purchasing process: Over 75% of consumers currently leverage the Internet to aid in the vehicle purchasing process:


Industry Overview

Market Size – Dealership Media / Advertising Internet Advertising Budgets are Growing: Advertising Expenditure by Medium


Industry Overview

Market Size – Dealership Media / Advertising Internet Advertising Budgets are Growing:


Industry Overview

Market Dynamics – Stability of Auto Dealerships •  

Contrary to popular belief, auto dealerships are financially stable enterprises and generally good credit risks.


Industry Overview

Market Dynamics – Stability of Auto Dealerships •  

Given the state of the economy, technology will continue to playa larger role in all departments of the dealership. •   Sales, service, F&I, parts

•  

Dealers currently spend 0.5% of sales on information technology, compared to 2.0% for the overall retail sector.

•  

Significant inefficiency continues to exist below the gross margin line in the dealership that can be mitigated by technology solutions.

•  

Recent pressure on gross margins will encourage dealers to adopt technology and improve processes in every department.

•  

Technology solutions must be complementary to the industry’s distribution channels, which will not change.

Technology + Marketing Materials


The Automotive Landscape AGENCY

TARGETED

SOCIAL

REPUTATION

SEM / SEO

RETENTION

MOBILE APPS

Agencies provide strategic and creative direction to their clients most often charge flat fees or a % of marketing budget

Companies combine a suite of services oriented around consumers most likely to purchase or service their vehicles for a specific brand and/or dealership

Companies that are providing technology platforms to create and manage the content on popular social platforms like Facebook &Twitter

Companies that provide technology to help the dealership & dealer manage their online reputation

Companies that provide Search Engine Marketing & Search Engine Optimization

Companies that provide software tools to help retain current customers for sales and service

Companies that provide mobile apps to help retain current customers for sales and service

1.62 Billion

216 Million

216 Million

1 Billion

324 Million

150 Million

Aspen DME Mudd Group

GOSO Digital Air Strike

eXteres DealerRater Digital Air Strike

Dealer.com Click Motive

Auto Alert

Click Motive

SALES TOOLS / TRAINING

NICHE TECHNOLOGY

3RD PARTY

CRM

WEB DEVELOPMENT

MEDIA

Companies that provide technologies and training designed to help a salesperson close a deal at point of sale

Companiesthat typically supply technology widgets which are integrated into larger technology platforms

Companies that have a national brand that provide 3rd party leads to dealers

Companies that provide Customer Relationship Management software platforms to help manage phone, internet, and showroom traffic

Companies that build dealership websites & microsites

The Leading Automotive Industry Publications and Online Communities

MARKET SIZE 4 Billion COMPETITORS RPI Saatchi & Saatchi Zimmerman

CALL TRACKING Companies that provide tollfree numbers and call tracking services to help monitor and manage phone traffic

Automotive Leadership Roundtable Dealer Elite

MARKET SIZE 324 Milion

Automotive Digital Marketing

1 Billion

150 Million

1.5 Billion

540 Million

216 Million

Dealer Marketing Magazine

COMPETITORS Call Source Call Bright Who’s Calling

Driving Sales

Dealer Magazine

Joe Verde Cardone Reynolds & Reynolds

Homenet Insta Quote

Cars.com AutoTrader TruCar Costco

eLeads Dealer Socket Vin Solutions Auto Base

Dealer.com Click Motive Reynolds & Reynolds

AutoSuccess Automotive News


The Automotive Landscape AGENCY

TARGETED

SOCIAL

REPUTATION

SEM / SEO

RETENTION

MOBILE APPS

AUTOMOTIVE  

Social  Media  

MARKET SIZE 4 Billion

1.62 Billion

216 Million

216 Million

1 Billion

324 Million

150 Million

Aspen DME Mudd Group

GOSO Digital Air Strike

eXteres DealerRater Digital Air Strike

Dealer.com Click Motive

Auto Alert

Click Motive

SALES TOOLS / TRAINING

NICHE TECHNOLOGY

3RD PARTY

CRM

WEB DEVELOPMENT

MEDIA

COMPETITORS RPI Saatchi & Saatchi Zimmerman

CALL TRACKING

?

Automotive Leadership Roundtable

?

MARKET SIZE 324 Milion

1 Billion

150 Million

1.5 Billion

540 Million

216 Million

Joe Verde Cardone Reynolds & Reynolds

Homenet Insta Quote

Cars.com AutoTrader TruCar Costco

eLeads Dealer Socket Vin Solutions Auto Base

Dealer.com Click Motive Reynolds & Reynolds

COMPETITORS Call Source Call Bright Who’s Calling

Dealer Elite Automotive Digital Marketing


Companies FORMED

COMPANY

OWNERSHIP

2011 REVENUE

2012 PROJECTED

66.67%

66.67%

66.67%

100.00%

100.00%

100.00%

04-15-2005

Team Velocity Marketing

10-15-2008

Tier 10 Marketing

10-15-2008

Callrevu

76.66%

76.66%

76.66%

12-10-2009

American Dream Network

95.00%

95.00%

95.00%

12-29-2009

Car-Mercial

50.00%

50.00%

50.00%

04-07-2010

Automotive Media Group

66.67%

66.67%

66.67%

04-16-2010

Digital Compass Marketing

40.00%

40.00%

40.00%

08-11-2010

Dealerelite

60.00%

60.00%

60.00%

01-08-2011

Intellacar

25.00%

25.00%

25.00%

03-18-2011

Dealerapp Vantage

49.00%

49.00%

49.00%

05-01-2011

Business Rater

50.00%

50.00%

50.00%

06-02-2011

Offerlogix

50.00%

50.00%

50.00%

08-19-2011

Automotive Logix

50.00%

50.00%

50.00%

08-19-2011

Automotive Development Partners

90.00%

90.00%

90.00%

03-15-2011

Automotive Leadership Roundtable

100.00%

100.00%

100.00%

09-30-2011

DrivingLoyalty.com

50.00%

50.00%

50.00%

10-26-2011

Automotive Social Sites

75.00%

75.00%

75.00%

12-01-2011

Group Cars

50.00%

50.00%

50.00%

Pending

Automotive Social Media

40.00%

40.00%

40.00%

Pending

Automotive Trading Group

100.00%


Revenue Rev Growth Rate Year

Revenue Team Velocity Marketing Tier 10 Marketing Callrevu American Dream Network Car-Mercial Automotive Media Group Digital Compass Marketing Dealerelite Intellacar Dealerapp Vantage Business Rater Offerlogix Automotive Logix Automotive Development Partners Automotive Leadership Roundtable DrivingLoyalty.com Automotive Social Sites Group Cars EBITDA GROWTH EBITDA% EBITDA Team Velocity Marketing Tier 10 Marketing Callrevu American Dream Network Car-Mercial Automotive Media Group Digital Compass Marketing Dealerelite Intellacar Dealerapp Vantage Business Rater Offerlogix Automotive Logix Automotive Development Partners Automotive Leadership Roundtable DrivingLoyalty.com Automotive Social Sites

84% 2010

2009

$

11,792,673

$ $ $

9,203,685.47 2,302,818.00 286,170.00

$

$

21,728,671

$

144,393.25 698,916.00 (101,611.00)

48,368,111

$

59% 2013

85,962,368

$

136,457,432

15,658,728.00 3,363,638.00 1,258,076.00 1,215,228.95

$ $ $ $ $

31,000,000.00 7,578,095.00 2,665,998.00 2,907,524.00

$ $ $ $ $

46,500,000.00 11,367,142.50 6,664,995.00 4,361,286.00

$ $ $ $ $

67,425,000.00 16,482,356.63 11,663,741.25 6,323,864.70

$

233,000.00

$

1,151,833.93

$

1,727,750.90

$

2,505,238.80

$ $ $

25,000.00 241,407.00 70,791.00

$ $ $ $ $

3,750,000.00 1,500,000.00 1,500,000.00 1,000,000.00 500,000.00

$ $ $ $ $

5,625,000.00 4,500,000.00 3,000,000.00 2,000,000.00 1,000,000.00

$

500,000.00

$

1,000,000.00

$

2,727,462.40

$ $ $

4,091,193.60 500,000.00 2,000,000.00

$ $ $

5,932,230.72 1,000,000.00 8,000,000.00

298% 14%

741,698

78% 2012

$ $ $ $ $

6%

$ $ $

123% 2011

$

105% 13%

2,953,821

$

184% 20%

6,057,004

$ $ $

2,253,838.00 892,887.00 (139,783.00)

$ $ $

5,358,000.00 (256,000.00) 90,000.00

$

(11,121.00)

$

723,004.00

$

(42,000.00)

$

45,000.00

$ $

2,000.00 5,000.00

$

90,000.00

$

17,192,474

98% 25%

$

34,114,358


Highlights •  

LARGE, PROFITABLE TARGET MARKET 21,650 franchised auto dealers that generated almost $700 billion in sales and $12 billion in profits in 2003; industry participants spend over $26 billion in advertising annually.

•  

INDUSTRY MOVING TO DIGITAL MEDIA 90% of consumers are researching vehicles online before purchasing, as a result, auto dealers’ spending on digital marketing solutions is growing rapidly.

•  

PROVEN ROI TO CUSTOMERS Member Companies solutions are proven to increases sales, customer retention, customer satisfaction and reduce marketing costs. All Member Companies have proven the capability of generating a return on investment for their clients.

•  

HIGH-GROWTH, HIGH-MARGIN BUSINESS Since developing its first product suite in 2006, the Company has experienced tremendous growth. 2011 projected revenues and EBITDA are $48 million and $6 million, respectively, increases of 123% and 105% from 2010.

•  

MANAGEMENT TEAM WITH EXTENSIVE AUTO EXPERIENCE Significant experience in software, training, and marketing solutions for auto dealers from companies such as Reynolds & Reynolds, ADP, AutoMark, HAC Group, CyberCar, Chrome Data, Dominion, Home Net, BZ Results, Toyota, Honda, and Acura.


Finances $140,000,000  

$120,000,000  

$100,000,000  

$80,000,000  

Revenue   EBITDA  

$60,000,000  

$40,000,000  

$20,000,000  

$0   2009  

Actual Revenue

2010  

2011  

2012  

Projected Revenue

2013  


1%  

Percentage of Revenue 0%   1%   2%   0%   2%   6%  

0%  

4%  

0%  

2%  

2%  

1%  

4%  

6%  

3%  

2%  

2%  

4%  

49%   5%  

2%  

6%  

9%   5%  

6%  

16%  

5%  

1%  

1%   1%  

1%  

12%  

8%  

54%   13%  

2013  

(Projected)  

2012    

(Projected)

64%  

2011   Team  Velocity  MarkeFng   Tier  10  MarkeFng   Callrevu   Car-­‐Mercial   Digital  Compass  MarkeFng   Intellacar   Dealerapp  Vantage   Business  Rater   DrivingLoyalty.com  

Team  Velocity  MarkeFng   Tier  10  MarkeFng   Callrevu   Car-­‐Mercial   Digital  Compass  MarkeFng   Intellacar   Dealerapp  Vantage   Business  Rater   DrivingLoyalty.com   Offerlogix   AutomoFve  Logix   AutomoFve  Leadership  Roundtable   AutomoFve  Social  Sites   Group  Cars  

Team  Velocity  MarkeFng   Tier  10  MarkeFng   Callrevu   Car-­‐Mercial   Digital  Compass  MarkeFng   Intellacar   Dealerapp  Vantage   Business  Rater   DrivingLoyalty.com   Offerlogix   AutomoFve  Logix   AutomoFve  Leadership  Roundtable   AutomoFve  Social  Sites   Group  Cars  


Impressive Customer List •   Includes some of the largest and most successful OEM’s, Advertising Associations and dealership groups in the country.

New  York  Acura   AssociaFon  

New  York  Honda   AssociaFon  


Management Team Sean Wolfington – Co Founder •  

Joined BZ in Q4 2002 as Chief Executive Officer, after four years as a passive outside investor in the Company

•  

Significant experience in software solutions and complementary training in the auto retail industry, most recently as a Vice President for Half-a-Car (“HAC”)

•  

At HAC, he was head of the CyberCar subsidiary (e-training solutions), a company he founded in 1996, as well as the co-head of Automark (web services)

•  

In 2000, CyberCar & AutoMark’s parent company, HAC, was sold to Reynolds & Reynolds (NYSE: REY), a large auto retail software provider, for $194 million in cash, stock, and contingent consideration

David Boice – Co Founder •   •   •   •  

Co-founder of Automotive Resource Partners, is a financier and entrepreneur with businesses in the marketing, technology, real estate, restaurant, and automotive industries. Beginning in 1988, founded some of the most successful marketing and consulting companies in the industry – Automark and Cyber Car (sold to Reynolds and Reynolds in 2001),Team Velocity, Mobiltrak and CallRevu. He served as President of AutoMark, VP of Reynolds & Reynolds and President of MobilTrak He is currently President of Team Velocity Marketing, Tier10 Marketing and CallRevu.


Automotive Industry Highlights LARGE Auto advertising spending exceeds $26.1 billion annually, making it the largest advertising category in the US – Auto dealer spending, at $8.5 billion annually, is a component of this.

STABLE PROFITABILITY Auto dealers continue to generate significant cash flows that have stabilized due to their high-margin, counter-cyclical service and parts business.

TRANSITION TO DIGITAL MEDIA Consumers are increasingly leveraging the Internet to aid in their vehicle purchasing process. Dealers are increasingly using digital media solutions to find, sell, and service these consumers.

INEFFICIENCY Although consumers demand quick response to their online requests, dealers have been slow to adopt best practices for timely response. In addition, the dealer follow-up cycle (1-4 days) does not match the customer buying cycle (1-4 months).


Case Study – Paragon Honda National Rank  

#1  

1 2 3 4 5 6 7 8 9 10 11 13 14 15 16 17 18

#17  

19 20

2008

2010


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