Insider View

Sean Raynor

President, Constellation Dealer Group

Hometown: Wake Forest, NC (USA)

Years in the industry: 31

Favorite Book: "Influence" by R. Cialdini

Dealer Group’s culture in one word: DRIVEN

We are looking for owners and/or operators who value their customer and employee relationships and their presence in the industry they serve. Our commitment is to honor what you’ve built and nurture its success for the long term.

Can you share your journey with Constellation Dealer Group?

My journey started when I graduated from school and was looking for my first real job. A friend from college just implemented a new software system at their dealership, which was state of the art, but they needed help implementing it. I became the second employee in the US for Integrated Dealer Systems (IDS) and spent the first six months just living at the dealership – learning the software and helping the team use the product.

When IDS was acquired by Constellation Dealer Group, I moved from the VP of Sales role to General Manager, which opened the door to an exciting new chapter with Constellation.

The dealer portfolio has expanded over time, and today, we are the largest group of companies focusing on improving dealer operations.

What is it about the dealer software industry that continues to draw you in?

I'm proud to have dedicated 30 years of my professional life to the dealer software industry. It's given me the opportunity to witness and be a part of its continuous advancements. It's exciting to me that the dealer business is always changing and embracing new technologies. The needs of one department is unique from the other, but ultimately, they're all connected and need to work together. But what continues to pull me toward the dealer software industry is the people. There are some really special, hardworking folks that I've met throughout the years, people who share the same passion for innovation and growth.

In terms of expansion and enhancement, what future direction are you considering for your portfolio?

Geographical boundaries are no constraint as we look to deepen our presence in existing markets and expand our reach internationally. We're excited about establishing a meaningful presence in other areas and integrating best-of-breed and point-driven solutions with our existing footprint. Our commitment to delivering value remains unwavering, and we're eager to adapt our offerings to cater to the unique needs of dealerships worldwide.

Can you describe a business that would be a good fit for your portfolio?

Any dealer software business that has built well-established relationships with customers and wants to see those relationships continue to grow would be a good fit for our portfolio. We place significant importance on those relationships because it means that the business is creating value for customers. We typically look for businesses with annual revenues between 2 and 20 M as our ideal profile, but we do consider both larger and smaller businesses.

Beyond the numbers, what do you look for in terms of culture and strategic fit when considering an acquisition?

We are looking for owners and/or operators who value their customer and employee relationships and their presence in the industry they serve. Our commitment is to honor what you’ve built and nurture its success for the long term. We highly value dedication, a collaborative spirit, and transparency. It’s vital for us that the businesses we bring into our fold understand that learning and working together is an integral part of staying at the forefront of the industry.

What would be the unique advantages of selling to Constellation Dealer Group as opposed to other acquirers?

Firstly, our understanding of the dealer software industry is unparalleled and we've cultivated a rich history of success in this specific domain. This means that we don't just see the value of what you've built, but we can amplify its potential in ways that other acquirers might not because of our operational expertise.

Secondly, instead of drastic changes or disruptions, we focus on enhancing your offerings to achieve maximum customer satisfaction and ensure a future where your business continues to thrive.

Can you share an example of how an acquired company significantly benefited from being part of your portfolio?

I’m confident in saying that every business we have added to our portfolio has benefited significantly. All of our businesses have similar challenges to build and maintain products, service the needs of the customers, and grow profitably. Our approach for newly acquired companies is peer-oriented – they gain access to a community of like-minded peers. This approach allows us to share insights, collaborate on challenges, and leverage the collective wisdom of our diverse experiences.

A prime example of this is Ideal Computer Systems. Since its acquisition 12 years ago, Ideal has grown fourfold, which is a 15% compound annual growth rate. It has done so well that at the beginning of 2023, our Board of Directors reviewed it as a case study on how to manage and successfully grow a business post-acquisition.

How do you help businesses in your portfolio grow?

Every business and situation is unique, but fundamentally, we help them grow by being laser-focused on their customer segment. We want a business to do everything they can to grow their existing customer relationships by expanding their footprint through product innovation.

We believe that you should first focus on growing your existing customer relationships before moving on to acquire new customers. A loyal and satisfied customer base forms the foundation of sustainable growth. Once you have built excellent relationships with your existing customers, you are in a much better position to build new relationships.

Post-acquisition, how does Constellation Dealer Group maintain the business’ legacy and continue helping it grow?

We have an appreciation of what the business has accomplished and take that responsibility very seriously. We consciously don’t undo any of the great things that have made the business successful. We’ll never amalgamate the brand, the business, or the customers into an existing platform.

We want the brand and its customers to continue on the path that was started by the owner, and we see ourselves as a caretaker of the legacy that has been built.

What advice would you give to a software business owner in the dealer industry who is thinking about selling their company?

Get to know the potential buyers. Ensure you have a clear understanding of what is going to happen with your employees, your customer relationships, and your product offering. Find out the track record of the potential buyers and their reputation in the industry and that what you value are the same things that your buyers hold valuable. It’s crucial to align with a buyer who genuinely understands and values the nuances of your industry and business.