MINNEAPOLIS—ARI Network Services Inc., a Milwaukee-based provider of Web-based products and solutions, has acquired out of bankruptcy the retail assets of Web solutions provider 50 Below Sales & Marketing Inc. as a key element to its strategy to tap into the automotive aftermarket.
Duluth, Minn.-based 50 Below filed for Chapter 11 bankruptcy protection in late August, claiming liabilities of more than $12 million—including $10.4 million in unpaid taxes and unemployment insurance—and assets of less than $50,000.
ARI, which offers products for market segments such as outdoor power, power sports, marine, RV and appliances, bid $5 million for 50 Below's retail division, which comprises primarily the company's dealings with the automotive aftermarket.
ARI President and CEO Roy Olivier said his company had been evaluating a move into the tire and auto service aftermarket for some time, and 50 Below's Chapter 11 filing expedited the firm's opportunity to do so.
ARI has products in its portfolio—such as a parts locator, Web solutions and lead-generation tools—that dovetail with the platforms 50 Below offers, Mr. Olivier said.
Mr. Olivier said the business being acquired represents about $13 million in annual revenue through accounts representing roughly 3,600 points of sale.
ARI's banking on growing the business profitably, he added, noting 50 Below's retail activities have booked 18-percent annual growth the past several years.
He said ARI's research shows about two-thirds of tire dealers are considered independent and thus in need of services such as those offered by 50 Below.
Regarding 50 Below's having to file Chapter 11, Mr. Oliver chalked it up to “questionable decisions” by management to put revenue back into the business instead of paying taxes and insurance.
The bankruptcy court accepted ARI's $5 million bid over a slightly higher bid of $5.15 million from Dominion Enterprises of Norfolk, Va., a competitor in the field. Dominion filed an objection to the court's decision, but the court later affirmed ARI's bid.
50 Below was founded in 1997 and has developed web-based products since then for a variety of industries, including agriculture/lawn, automotive wheel and tire, durable medical equipment, marine, powersports, pool, spa and leisure, and financial.
The company has about a dozen employees in Duluth.