Spencer Capital Holdings Acquires SouthWest Dealer Services

Deal Expected to Fuel Expansion of Leading Full-Service F&I Provider in the US

March 18, 2015

NEW YORK, NY, March 18, 2015 – Spencer Capital Holdings, Ltd. (“Spencer Capital”), a value-oriented global holdings company, has acquired SouthWest Dealer Services (“SWDS”), a leading independent full-service provider of finance and insurance (“F&I”) products and services to auto dealers in the United States. SWDS has more than 250 employees that currently serve over 550 active dealers across 14 states in the south-western and mid-western US. Financial terms of the transaction were not disclosed.

SWDS is an independent full-service F&I distribution platform, founded in 1988 by Steve Alderson. The firm’s approach utilizes local sales forces whereby dealers have a hands-on experience with SWDS representatives in their individual markets. SWDS currently operates eight strategic locations, situated within the dealer markets they serve.

The acquisition of SWDS is immediately accretive to Spencer Capital and is complementary to its existing portfolio of companies. The financial and operational support of Spencer Capital will provide SWDS with the opportunity to grow its presence and expand its client capabilities, while maintaining its autonomy. Dealers are expected to significantly benefit due to increased and efficient access to products and services across the Spencer platform, notably from Spencer Re, a reinsurance firm, and USA Risk, an independent captive insurance provider.

“We’ve known the team at SouthWest Dealer Services for years and they have an outstanding reputation in the industry, which we experienced firsthand through Spencer Re,” said Ken Shubin Stein, Chairman of Spencer Capital. “The partnership is both a natural and strategic fit as there are multiple growth channels for us moving forward. We’re excited to invest alongside the management team to build out a ‘coast to coast’ footprint for SWDS, which will both complement and fuel the development of Spencer’s existing global platform of leading and value-driven insurance and financial services companies.”

Commenting on the transaction, Steve Alderson, Founder of SWDS, said, “Partnering with Spencer Capital is a best of both worlds situation. We’re looking to capitalize on the wave of industry consolidation and expand geographically through strategic acquisitions, while maintaining the level of local support that our dealers are accustomed to. SWDS has been approached by many capital sources over the years, but until we met the team at Spencer Capital, we hadn’t found a truly strategic partner that mirrored the image of what we are trying to create.”

SWDS will keep its name and continue to operate as it has effectively done for more than 25 years. There will be no personnel changes as a result of this transaction.

Spencer Capital Holdings, Ltd.

Spencer Capital Holdings, a global holding company, owns Spencer Re, a reinsurance firm focused on the American auto dealership industry, USA Risk Group, the largest independent captive insurance manager in the world, and is affiliated with Spencer Capital Management, a value-oriented investment management firm. Spencer Capital Management provides support to philanthropic endeavours including, Crutches 4 Kids, a non-profit organization devoted to helping children with physical disabilities walk. Spencer Capital Holdings was founded in 2011 by Chairman Dr. Ken Shubin Stein.

SouthWest Dealer Services

SouthWest Dealer Services is a leading independent full-service provider of finance and insurance (“F&I”) products and services to automotive dealers in the United States. The company has eight franchise-type offices across the US in Arizona, California, Colorado, Kansas, and Washington. Founded in 1988 by Steve Alderson, the firm focuses on providing dealers with one efficient source for products and services, offering auto security products, vehicle service contracts, guaranteed asset protection (“GAP”) programs and other ancillary F&I products. The firm is headquartered in Irvine, CA. For more information on SWDS, please visit swds.net.

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