Speedemissions Acquires Auto Recycling of Montgomery
Speedemissions, Inc. announced that it has closed an asset purchase agreement with Auto Recycling of Montgomery (ARM). The purchase includes the assets of ARM including land, buildings, equipment and inventory. ARM, an Alabama-based auto recycling facility, ceased operations in June 2014.
“This segment of the automotive industry has been carefully reviewed and studied as was noted in the shareholder update. There are a number of parallels between the salvage yard and emission testing industries. It’s highly fragmented, has stable revenue streams and consistent cash flow. In addition, with the average age of cars in the United States at 11.6 years, we believe that it will offer us the opportunity to grow our business in a steady manner over the next few years," stated Rich Parlontieri, President/CEO of Speedemissions.
Speedemissions, www.speedemissions.com, is a leading vehicle emissions testing and safety inspections company operating 22 stores in the Atlanta and St. Louis markets. It is the developer of the iPhone app CARbonga-SRI, and BuyCarSafety.com’s ADVISR (Automotive Vehicle Information Safety Report).
Speedemissions stated that it intends to create an auto salvage business operation at the existing location in Montgomery, Ala., but expects it will take approximately 60 days to hire employees and put the necessary business systems in place before sales operations can commence.
The company has formed a wholly-owned subsidiary for the purpose of seeking future acquisitions within the auto recycling industry in addition to its existing vehicle emission testing business operations.
“During our due diligence, we realized that there exists a significant number of industry candidates across the United States and Canada that may present attractive opportunities for us. We are looking to focus on the $500,000 to $2 million dollar yard opportunities, initially,” added Parlontieri.