Holley acquires MSD Group

[Bonehead]

http://www.wdrb.com/story/30096213/z-capital-partners-announces-sale-of-msdp-group-to-lincolnshire-management

There are a ton of rumors as to what is next. The consolidation of major brands continues, for those of you interested in the business side of the performance and accessory aftermarket.

[CampbellshotrodsAZ]

I'm not really sure I like this. This after MSD buys Accel/Mallory this year, which sucks because I wanted a Mallory for my Edsel, not a $400 MSD Pro-Billet.

At least Holley buying MSD will be less of a conflict of interests thing I guess, since they don't have much overlap.

[analyte]

Interesting, I'm curious as to what Holley may do with the new LS Airforce intake if anything.

[all4sho]

crazy to me

[andrewb70]

Seems like a good move. Holley needs an ignition product to round out their EFI offering.

Andrew

[Rocker75]

Another example of corporate merger mania. They think they have to keep to growing and when they can't get any bigger in their market, they have to buy another company. It's a gross example of corporate greed. Maybe there should be some kind of limit on how big a company can be

[andrewb70]

Another example of corporate merger mania. They think they have to keep to growing and when they can't get any bigger in their market, they have to buy another company. It's a gross example of corporate greed. Maybe there should be some kind of limit on how big a company can be

With all due respect, you're talking nonsense.

Andrew

[Bonehead]

Another example of corporate merger mania. They think they have to keep to growing and when they can't get any bigger in their market, they have to buy another company. It's a gross example of corporate greed. Maybe there should be some kind of limit on how big a company can be

Then whats to say you wont be limited on what you can have/earn?

[GEARBOXGARAGE]

All of the current MSD products will still be branded as MSD and built under those designs/patents. Same as when MSD bought Mallory, they didn't do away with the Mallory design or patents. You will still be able to buy MSD Atomic EFI, Pro-Billet Distributors, etc. MSD has been in and out of financial struggles for several years. They made an attempt to revive the company by merging with Mallory and Accel, but sometimes the road to Hell is paved with good intentions. Is it corporate greed for companies to merge to remain profitable so they can continue offering good products? I agree with andrewb70, Holley has been lacking in the ignition department and it was a natural progression I think.. When I bought my Terminator, they call out MSD products right in the instructions, so I wonder if this has been something in the works for a while..

[andrewb70]

According to the press release MSD is not being bought by Holley, but by the equity group that owns Holley. This leads me to believe that MSD will function as it always has, but there will be synergy created between Holley and MSD.

Andrew

[GEARBOXGARAGE]

According to the press release MSD is not being bought by Holley, but by the equity group that owns Holley. This leads me to believe that MSD will function as it always has, but there will be synergy created between Holley and MSD.

Andrew

Right, Holley Performance Group. It was just easier to type Holley.:twothumbs

[sccacuda]

Could be good or bad. I'm a Holley dealer, and Holley sells direct. They will undercut their own MAP pricing to make the sale in house. When they bought Diablo, we became dealers, BUT Diablo dealers became Holley dealers without buy in. Added about a 1000 Holley dealers! So the already stupid competitive sales market got worse. I am told that MSD will start direct sales as well and all Holley/Diablo dealers become MSD and vice versa. So from a consumer stand point, it's a huge win. From a dealer stand point its almost not worth doing. Spending hours talking with people and tons of emails to get the customer what he needs to have Holley direct steal the sale or one of the now too many dealers give it away.

[SSLance]

Could be good or bad. I'm a Holley dealer, and Holley sells direct. They will undercut their own MAP pricing to make the sale in house. When they bought Diablo, we became dealers, BUT Diablo dealers became Holley dealers without buy in. Added about a 1000 Holley dealers! So the already stupid competitive sales market got worse. I am told that MSD will start direct sales as well and all Holley/Diablo dealers become MSD and vice versa. So from a consumer stand point, it's a huge win. From a dealer stand point its almost not worth doing. Spending hours talking with people and tons of emails to get the customer what he needs to have Holley direct steal the sale or one of the now too many dealers give it away.

I smell what you are cooking there and it sounds almost exactly like the business that I am closing down today. Anytime your vendor is also your competitor, it is almost always a bad business model.

It does sound like a win for the consumer though as that is a very strong ownership group that does things right. I was truly impressed when touring their facility back in June.

[Bonehead]

MSD has been in and out of financial struggles for several years. They made an attempt to revive the company by merging with Mallory and Accel, but sometimes the road to Hell is paved with good intentions.

Not true. MSD has been strong for years. The trouble is their tuning companies Edge and Superchips. That's where all the debt came from and that's what MSD cleared off their books when they filed 3 years ago. The Powertec stuff was good initially, but ones the government fined Edge and demanded they buy back all the DPF delete products on the market, it added debt that MSD fond impossible to clear. Restructuring was the only way to do it.

[Bonehead]

Could be good or bad. I'm a Holley dealer, and Holley sells direct. They will undercut their own MAP pricing to make the sale in house. When they bought Diablo, we became dealers, BUT Diablo dealers became Holley dealers without buy in. Added about a 1000 Holley dealers! So the already stupid competitive sales market got worse. I am told that MSD will start direct sales as well and all Holley/Diablo dealers become MSD and vice versa. So from a consumer stand point, it's a huge win. From a dealer stand point its almost not worth doing. Spending hours talking with people and tons of emails to get the customer what he needs to have Holley direct steal the sale or one of the now too many dealers give it away.

Holley is one of the worst margin brand in the category. The investment company knows that. The only way to fix that is with a UPP type program that raises the retail pricing so the two step distribution model has some margin built in to operate on. Too big a shock to the system. The investment company wants their investment to grow. The only other logical way through that is to cut two step and sell the Holley brands direct to the consumer and add a significant amount of margin and more importantly, profit dollars to the balance sheet. Holley got in trouble when it wanted to grow the top line number a few decades ago. Getting healthy will take a huge change that the industry isn't going to like. Unless of course as you correctly put it, are the end consumer.

[GEARBOXGARAGE]

Not true. MSD has been strong for years. The trouble is their tuning companies Edge and Superchips. That's where all the debt came from and that's what MSD cleared off their books when they filed 3 years ago. The Powertec stuff was good initially, but ones the government fined Edge and demanded they buy back all the DPF delete products on the market, it added debt that MSD fond impossible to clear. Restructuring was the only way to do it.

Yes, I'm familiar with that. That's what caused them to have hardships. Here's an article on it.
http://www.ssgca.com/content/msd-performance-inc