O’Melveny Worldwide

O’Melveny Advises Kayne Partners in Investment in Wholesale Auto Platform Signal Automotive

November 16, 2020


CENTURY CITY—November 16, 2020—O’Melveny advised longtime client Kayne Partners, the growth equity group of Kayne Anderson Capital Advisors LP, in its lead role in the investment in wholesale auto sales, delivery, and pricing platform Signal Automotive.

Kayne Partners manages an approximately US$385 million investment fund, with a lower middle-market focus on promising technology-enabled businesses.

Signal Automotive’s Predictive Inventory Engine (PIE) helps vehicle dealers optimize their inventories through analysis of what does and does not sell in their regions, and suggests appropriate models for them to stock. The company will use investment proceeds to broaden its technology offerings and expand its dealer network in North America.

Corporate partner David Smith, based in O’Melveny’s Century City office, has led teams advising Kayne on a number of recent investments into innovative companies in a wide range of industries, such as geospatial data and analysis, wellness management, global law firm consulting and technology services, and executive search functions. In this most recent representation, Mr. Smith was assisted by counsel Melissa Wright and associate AJ Talt.

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Christopher Rieck
O’Melveny & Myers LLP
+1 212 326 2218

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Signal Automotive issued the following press release:

Signal Completes $20MM Financing to Accelerate Growth of its Wholesale Automotive Platform

November 10, 2020 11:00 AM Eastern Standard Time

LOS ANGELES--(BUSINESS WIRE)--Signal Automotive, a technology-enabled wholesale automotive platform, today announced a $20MM investment led by Kayne Partners Fund, the growth private equity group of Kayne Anderson Capital Advisors, L.P. The Signal platform is a unique combination of proprietary software and managed services that optimize the buying, selling and inventory allocation processes for licensed dealers throughout Canada and the United States.

Selling dealerships receive near real-time, guaranteed offers on their trades, allowing them to shorten the time to close a sale which drives more business. Buying dealers get consistent access to inventory with a streamlined process that enables them to buy efficiently at scale.

Signal’s Predictive Inventory Engine (PIE) makes this possible, utilizing millions of real-time vehicle and market data points to assist dealers in optimizing their inventory mix and understanding what is and isn’t selling for them, and their geographic market as a whole. Using PIE, Signal can then show a dealer a curated list of available vehicles best suited to them. The signal platform is the only place where a dealer can purchase “20 vehicles in 20 minutes.” Vehicles are then delivered front line ready to dealers’ lots, with all logistics and transportation included in the price.

“We are very excited to partner with Steve and the Signal team. Their technology-focused disruptive approach to the overlooked wholesale automotive market is driving considerable value for both buyers and sellers,” said Nate Locke, Managing Partner, Kayne Partners Fund. “We are eager to help Signal accelerate its growth and continue developing innovative technologies to establish itself as a critical part of the supply chain for its dealer partners.”

Signal will utilize the financing to expand its dealer network across North America and further investment into its technology platform and data analytics capabilities to enable its dealer partners to be even more efficient.

“We launched Signal three years ago with a vision of tech enabling wholesale, an often-overlooked segment of the $1.4T automotive sector in the U.S. We couldn’t be happier with the progress we’ve made and how receptive our dealer partners have been as we bring wholesale out of the shadows,” said Steve Jillings, co-founder & CEO, Signal Automotive. “And now, along with the entire Signal team, I am thrilled to have Kayne Partners as our first outside investor. We could not have chosen a better group to build a world-class company with.”

About Signal Automotive:

Signal is a technology-enabled automotive wholesale platform that utilizes data to optimize wholesale dealer trades. Created to modernize and automate the wholesale process, Signal allows buyers and sellers to leverage its powerful near real-time appraisal platform. Signal’s Predictive Inventory Engine (PIE) enables dealers to understand their optimal inventory mix and then purchase curated lists of wholesale vehicles. Signal’s pricing model includes delivery of front-line ready vehicles to a dealer’s lot, saving time, money and energy! The platform creates efficiency throughout the wholesale process by providing transparent pricing, consistent inventory, high quality, and simplified logistics. Signal was founded in 2017 and has offices in Vancouver BC, Lynden WA, Los Angeles CA and Vilnius L.T. For more information, visit www.signal.vin.

About Kayne Partners Fund:

Kayne Partners, the Los Angeles-based dedicated growth private equity group of Kayne Anderson Capital Advisors, L.P., is a leading provider of capital and connections to privately held, high growth, enterprise software and tech-enabled service businesses in North America. Kayne Partners seeks to partner with driven entrepreneurs and provide capital to high growth companies at a transformative point in their life cycle in the following industries: security & compliance, supply chain & logistics, financials, business process automation, healthcare, and media & telecom. For more information, please visit www.kaynepartners.com.

About Kayne Anderson Capital Advisors, L.P.

Kayne Anderson Capital Advisors, L.P., founded in 1984, is a leading alternative investment management firm focused on real estate, credit, infrastructure/energy, renewables, and growth equity. Kayne’s investment philosophy is to pursue niches, with an emphasis on cash flow, where our knowledge and sourcing advantages enable us to deliver above average, risk-adjusted investment returns. As responsible stewards of capital, Kayne’s philosophy extends to promoting responsible investment practices and sustainable business practices to create long-term value for our investors. Kayne manages $30 billion in assets (as of 9/30/2020) for institutional investors, family offices, high net worth and retail clients and employs over 350 professionals in five core offices across the U.S. For more information, please visit www.kaynecapital.com or investorrelations@kaynecapital.com.