Private equity firm Calera Capital has purchased a majority stake in finance and insurance product compliance provider F&I Sentinel.
F&I Sentinel did not disclose terms of the deal in a Monday news release announcing the acquisition.
“We were not really looking for any investor,” F&I Sentinel CEO and co-founder Stephen McDaniel told Automotive News on Tuesday. He said his company happened upon Calera, which focuses on founder-owned businesses that have scaled quickly.
“We have grown very rapidly,” said McDaniel, who launched F&I Sentinel in 2019 with fellow co-founders and insurance regulatory attorneys Matthew Nowels and Tim Meenan Jr. All three continue to be investors in the firm, McDaniel said.
McDaniel and Nowels have continued in their roles of CEO and senior vice president of operations following the acquisition. Meenan has not been involved in the day-to-day operations of the company.
“F&I Sentinel adds tremendous value to all members of the vehicle financing ecosystem,” Calera Managing Director Brian Fearnow said in the news release. “We look forward to partnering with the management team to further enhance and extend the ways in which F&I Sentinel protects finance companies, dealers, and consumers.”
F&I Sentinel reviews F&I product terms to assure lenders they’re not financing something that could prove problematic with regulators, according to McDaniel.
“Automotive finance companies, banks and credit unions face complex compliance and risk mitigation challenges,” Calera Senior Managing Director Paul Walsh said in the release. “F&I Sentinel represented a terrific opportunity to invest behind a market-leading business that provides unique technology and services to help financial institutions successfully navigate these issues.”
McDaniel said the company has reviewed 32,866 submissions from lenders since its inception. He said products change more than he had anticipated.
“It’s a living and breathing database,” McDaniel said.
McDaniel said F&I Sentinel appears poised for significant growth, and it plans to market itself more publicly than in the past.
He said it also is becoming a software company and referenced the launch of FAIRRCalc, which stands for Finance and Insurance Refund Recovery Calculator. The tool helps finance companies determine guaranteed asset protection waiver refunds should the customer cancel before the end of the term.
Building out a software development team is a company goal, McDaniel said.
