Bain Capital, Abu Dhabi investment firm to buy Merchants Automotive Group

Jul. 21—Merchants Automotive Group, which includes a nationwide fleet-management business and the Hooksett-based auto dealer, is being acquired by two investment groups, Merchants announced Thursday.

Bain Capital, the venture-capital firm co-founded by U.S. Sen. Mitt Romney, and the Abu Dhabi Investment Authority have signed an agreement to acquire the Merchants companies. The deal is expected to close in the fall of 2022.

"Since my father Irving Singer founded Merchants in 1962, we have grown alongside our clients through innovation and developing new service offerings," said Gary Singer, the outgoing Merchants board chairman and owner, in a statement.

While people in the Granite State are most familiar with Merchants Auto — the used car dealership with the quirky radio ads — that part of the company makes up only about 5% of the business.

The star of the transaction is Merchants Fleet, the nation's fastest-growing fleet management company, which provides fleets of vehicles and management of those vehicles to 20 unique industries. It is headquartered in Hooksett and has an innovation center in the Chicago area.

Merchants is the fourth-largest fleet management company in the United States, with more than $2 billion in assets and 165,000 units across North America. Its business model focuses on electric vehicles, technology and innovative services.

Some include delivery of online purchases. The company said Merchants fleet vehicles delivered 4 million packages a day during the 2021 Christmas-holiday season.

Terms of the transaction were not disclosed. Members of the current Merchants leadership team will retain their current roles and be co-investors.

CEO Brendan P. Keegan, who joined the company in 2018, will also become president and board chairman. Keegan oversees 650 employees, and will remain with the company.

"There is no change to employment. No job elimination," Keegan said during an interview Thursday. "What this will mean is we will have more capital to grow."

Keegan, who joined the company in 2018 after serving on its board of directors, has been largely responsible for driving that growth. Back then, the company had $500 million in assets; he expects it will close the year with $2.5 billion.

With the new ownership, Keegan won't have to raise capital, which used to take about a third of his time, he said.

"Any idea that we wanted to execute we had to self-fund," he said.

Bain Capital began investing in the company in 2020.

"It's kind of like a lease to own. They got to know us over the past 2 1/2 years," Keegan said.

He noted the local impact of the Singer family, which had been looking to exit the business.

"They had decided that they would sell when the time was right," Keegan said.

In recent years, Merchants Auto's folksy persona, perpetuated by radio commercials featuring voice actors mimicking George W. Bush, Bill Clinton and other ex-presidents, obscured the rise of the fleet business, at least in the Granite State.

Outside New Hampshire, Merchants Fleet was becoming known as a national player.

In addition to Bain Capital and Abu Dhabi, Merchants received bids from other investment firms in North America, Japan and the Asia-Pacific region, Keegan said.

"We really took a global approach," he said.

Established in 1976, the Abu Dhabi Investment Authority invests funds on behalf of the government of Abu Dhabi, the capital of the United Arab Emirates, the seventh largest oil producer in the world.

Bain Capital counts $160 billion in assets under management and offices on four continents.

"When we initially provided growth financing to Merchants in 2020, we had our eye on a longer-term partnership," said Olof Bergqvist, a managing director at Bain Capital, in a statement.