Duane Rouse has been a road warrior in the merger-and-acquisition wave of the past several years.
Rouse, 55, is CEO of Brooklyn Park-based ABRA Auto Body & Glass, a small auto body operation owned by two partners when he arrived as chief financial officer in 1996.
Rouse has been a key player, particularly as CEO since 2011, in building the company from 50 collision-repair centers to 336 shops in 24 states that generate annual revenue of more than $1 billion.
ABRA has emerged as one of four big acquisitive firms in the trade that, combined, control only about 15 percent of the business in what is still a ma-and-pa industry of about $35 billion annually.
“I hate the word ‘consolidator,’ ” said Rouse, 55, who hails from a working-class Milwaukee family and worked his way to an accounting degree loading trucks for home movers. “I used to know just about everybody in the shops, and that’s not true anymore.
“But we pride ourselves on operational excellence. We fix cars, take care of customers and invest in our people. High quality. High safety. High customer satisfaction. And we can invest because of our size. And we tend to improve the independent shops that we acquire through better processes and training tools and customer focus.”
Regardless, this is no longer a small business. Over the last several years on Rouse’s watch, ABRA has been owned by two private equity firms, completed 50 acquisitions and grown to 3,500 employees. Rouse wouldn’t disclose net income, other to say the company is profitable.
Service technicians with high school degrees and ABRA’s in-house training can earn more than $70,000 plus good benefits after five years
Dave Kuhl, ABRA’s chief personnel officer, says there is “zero unemployment” in the auto body trade. ABRA just opened its first “career development academy” in Eagan to stimulate the flow of qualified workers. And car crashes are a growth business in this good economy.
The average repair is $2,200 to $2,500, higher in the winter when brakes fail and reckless, cellphone-wielding drivers slide into each other.
Rouse likes to keep things simple. ABRA has shrunk its once foot-thick operations manual into a concise, 37-page playbook.
But Rouse is flexible. For example, not every acquired shop is called ABRA right away, and there is no post-deal housecleaning of workers.
For example, ABRA last year purchased six-store Lehman’s Garage of Minneapolis. The Cossette family that owned Lehman’s since 1969 had lost their patriarch in 2007. Family members and a couple other partners were undecided about the future. ABRA’s unspecified cash offer helped them make the decision. Lehman, a good name in the local trade, is still on the shingle.
In a recent interview, the affable, informal Rouse, a one-time auditor at PricewaterhouseCoopers, said he spends half his time on the road, either involved in acquisitions or meeting with employees, explaining the ABRA culture and that everybody on the floor will keep a job.
“I just focus on telling employees that ABRA is a big company but we focus on each shop and taking care of customers and fixing cars,” Rouse said. “We focus on customers and well-trained employees.”
ABRA’s turnover is less than the industry rate, Rouse said, even though “competitors like to poach employees and there’s a shortage of technicians.”
“Our training is good,” he said. ”We like to develop our people, and most of them stay.”
Two years ago, the San Francisco private equity firm Hellman & Friedman acquired ABRA, along with its senior management team, from another private equity firm, Palladium Equity Partners. Palladium had owned ABRA for three years.
Look for ABRA to go on buying smaller shops and possibly selling stock in an initial public offering as it is starting to achieve public-company scale; that’s often the exit strategy after a year of private equity ownership.
However, Rouse, the road warrior, is slowing down after 20 years, including five in the driver’s seat during an acquisition-fueled revenue-growth surge of 36 percent annualized on his watch.
“I think about the business 24/7 and it can be stressful,” said Rouse. “It’s gotten better, but I need to get away from it [more].”
Rouse, when a successor is hired this fall, will become vice chairman, assisting the new CEO initially, and work on strategy, relationships with insurance companies and acquired franchises.
“I was able to coach baseball and basketball when our kids were young and I was CFO,” he said. “As CEO, I was busier and the kids were older. There were [family] sacrifices. My wife has taken that. No regrets, but it’s time …”
Neal St. Anthony has been a Star Tribune business columnist and reporter since 1984. He can be contacted at firstname.lastname@example.org.