Auto Data Network Inc.-which built its European software base with about 10 acquisitions there-recently bought CarParts Technologies Inc. as its foothold in the U.S. market.
``We intend to expand across North America in the same way as we have across Europe,'' said Chris Glover, chairman of Tunbridge Wells, United Kingdom-based Auto Data.
For its part, CarParts hopes the acquisition, which has been in the works since July 2003, will push the San Juan Capistrano-based automotive software maker to new heights in the U.S. President Dave McCann said CarParts-which previously had been backed by private venture capitalists-will be helped primarily by an infusion of capital from Auto Data.
``Our view has been all along that this marketplace wants to see a clear, dominant provider of software,'' he told Tire Business.
CarParts itself was formed by the acquisition of three companies, and Mr. McCann said the fast growth of the 1990s will be contrasted this decade by consolidation. ``Our strategy all along has been to be the surviving dominant player,'' he added.
A day after the completion of the acquisition was announced, Auto Data said its new subsidiary won a contract with Big O Tires Inc., a subsidiary of TBC Corp. Big O's contract covered CarParts' VAST point-of-sale, multi-store and OpenWebs software.
Big O officials were unavailable for comment, so it's unclear if the Auto Data acquisition had an impact on Big O's decision. Mr. McCann said the software packages will allow Big O to have a consistent system across all of its some 560 stores.
CarParts, founded in 1997, said its software is used in more than 3,000 outlets, including Monro Muffler & Brake and Canada's Fountain Tire.
According to Mr. McCann, about 72 software companies serve the North American automotive aftermarket. Of those, he said about 60 are small companies owned and funded by an individual with perhaps three to four software engineers.
These undercapitalized companies traditionally also don't have audited financials, Mr. McCann claimed.
Auto Data, on the other hand, is publicly traded, giving customers more confidence in its financial stability, Mr. McCann claimed. The company's revenue has grown from about $5 million to more than $70 million in two years, he said, primarily through acquisitions. CarParts also has an engineering team of about 40, he added.