Live Deals: Trivest Expands Transport Portfolio –

Pursuing its interest in the automobile industry, Trivest last month teamed with five former Ryder Transportation Services executives to form Transportation Equipment Asset Management (TEAM), a vehicle management and sales company.

Separately, Trivest acquired Directed Electronics, a creator of automobile security systems, for more than $100 million.

Peter Vandenberg, a managing director at Trivest, declined to discuss the amount of equity his firm will provide the newly established TEAM, but said it will be enough to fund vehicle purchases and the development of 26 retail centers across the country over the next five years. Deutsche Financial Services Corp. will provide a $25 million revolving credit line.

The company will purchase vehicles, mainly trucks, from large entities such as Penske Corp. and U-Haul International as those companies’ leases on the vehicles expire. TEAM will then take the vehicles to one of its retail locations and attempt to sell them to businesses in need of used trucks. Additional truck, tractor and trailer sales capacity will be provided through proprietary wholesale channels.

The company expects approximately $60 million to $100 million in revenue for the first year of operations, Vandenberg said.

Jim Guice, president of TEAM, and the four other executives who make up the company were formerly responsible for managing the operations of Ryder’s vehicle sales division.

Ryder Transportation Services, a division of Ryder System, currently is the largest seller of used trucks with approximately $400 million in revenue for its used truck selling division, 38 retail locations, and a 5% to 6% market share, he said.

Guice said he and the other former Ryder executives left Ryder to form their own company because Ryder wanted to keep selling only Ryder vehicles while the executives saw potential in selling other companies’ vehicles, as well as providing other services to its customers. These services will include highway transportation asset management, fleet analysis, vehicle specification and, eventually, new vehicle financing and vehicle securitization of existing fleets.

Vandenberg said among the five executives leading TEAM lies a combined 107 years of management experience in the transportation industry.

New Platform

In late December, Trivest acquired Directed Electronics of Vista, Calif.

For the more than $100 million deal, total equity, which was supplied by Trivest, the company’s management, BancBoston and Massachusetts Mutual Life Insurance Co., topped $40 million, said Troy Templeton, senior managing director at Trivest.

Debt was provided by Canadian Imperial Bank of Commerce, MassMutual and BankBoston.

Templeton said Trivest will be looking for opportunities to build Directed Electronics through acquisitions. The company’s flagship brand name, Viper, will serve as a platform for the firm’s mobile electronics build-up.

Directed Electronics holds the largest market share in the industry and markets its security systems under the brand names Viper, Python, Sidewinder, Hornet and Wasp. In addition, Directed Electronics markets a line of automobile audio speakers and amplifiers.

The company has more than 700 products that are sold through mobile electronics and stereo stores and automobile dealerships. It anticipates approximately $85 million in revenue for 1999.

Trivest is looking to double the size of the company in 18 to 24 months, Templeton said.

Directed Electronics and Trivest’s future investments in automobile electronics will remain separate from Penda Corp., Trivest’s portfolio in the truck accessories sector, he said.

In November, Miami-based Trivest launched a $450 million third fund (BUYOUTS Nov. 8, 1999, p. 10), which at press time had not yet had a close. However, Templeton said equity for the acquisition came from Funds II and III.