Auto Recycling World speaks to Ryan Falco, President, and Tom Denton, CEO at Aesop Auto Parts, a US-based company that serves as a platform to acquire and grow progressive auto recycling businesses, about the history of the company and the role it plays within the auto recycling industry.
Can you describe the story of Aesop?
Aesop was the thesis idea of entrepreneur-investors Al Taj and Chris Ganz of Outerbound Capital. They then partnered up with American Pacific Group as equity partners to add their talents and expertise.
Aesop was named after its namesake Greek fabulist. One of his stories details the importance of unity and working together through the image of a single stick breaking easily while a bundle of sticks is unbreakable. This unity is what Outerbound wanted to achieve when they conceptualized and started this company. Their vision became a reality when Dale Bevell from Wayne Auto Salvage took a leap of faith and was the first to trust the two with his business. Wayne became the first “stick” in the Aesop bundle.
The team went on to acquire Gravely’s Used Auto & Truck Parts in 2021. In March 2022, Aesop finished the acquisitions of Knox Auto Parts and Midway Auto Parts – two of the largest independent auto salvage companies. Liberty Auto Salvage and Lewisville Motor Company quickly followed. Our latest additions, American Auto Salvage and Hi-Way Auto Parts introduced us to the Texas market. We have also finished our acquisitions of Tri-State Auto Parts in Walls, Mississippi, and Sonnys Auto Parts in Jacksonville, Arkansas, in Q1 of 2023. We have been fortunate to bring together an outstanding team and a competitive, well-run group of yards. Our growth over the past couple of years is a strong testament to the tremendous team of people who deeply care about each other, our customers, and the industry.
Ryan, you are the President, and Tom, you are the CEO. How did this come about, and why do you think so much conglomeration is happening now? Also, how much do EVs play a part in people’s decision-making?
Both Knox and Midway have had a very close working relationship over the years, not only because of our early affiliation with Team PRP but also working together for numerous years in the same Profit Team group. When the opportunity came to team up with Aesop, we were very much in the right place at the right time. We both had a long tenure in the industry and experience successfully running multi-site operations. We already knew we worked well together and shared a vision to help create a long-lasting company that was built around our employees and customers. With the past working relationship, it just seemed like the right fit. It’s been really rewarding to further grow our team with other industry veterans as well as key people from outside the industry who bring huge amounts of knowledge and skillsets. We’ve assembled a very strong team with diverse backgrounds that shares our goals and complements our employee and customer-focused culture. This shared culture and values are important factors in selecting not only individual talent but future acquisitions.
For us, the chance to tap into the best of the best in the industry is one big benefit of consolidation. We’ve brought together a set of sites that each do a lot of things well that we can learn from and apply across our national network to benefit our collective customers. Obviously, there’s also a huge benefit to being able to move inventory across our network as well. At the same time, we’re seeing unprecedented growth in our industry. Given the uncertainty and the impact the COVID-19 pandemic has had on the automotive industry, consolidation has given us access to new investment capital to adapt to the challenges presented by COVID as well as the shifting recycling landscape.
Electric vehicles are certainly top of mind regarding the evolving landscape, and it will play out over the years to come. While we are preparing for the future of dismantling EVs, we don’t want to lose focus on where most of our demand comes from. It is a delicate balance of preparation and patience as this evolves.
What advantages do companies like Aesop bring to the auto recycling industry, and what part will it play as the company evolves? Also, is there still a place for independent business?
Aesop allows us to invest in the future on a larger scale than if we were to stay as independents. It also allows us to grow our footprint in used parts sales and remanufactured sales. We are hyper-focused on getting to where our inventory is easily moved between regions and facilities, decreasing cycle time for our end customers. In addition, as we become one, we will achieve better economies of scale. With that said, we believe that together we can expand the need for used parts for everyone in this space. There will always be a role for independents, and we look forward to continuing our partnerships with independent auto recyclers and continuing to be advocates for the entire automotive recycling community.
What do you look for in a company when considering bringing a company under the Aesop banner?
Our M&A team has specific criteria that they look for when looking at a yard. Above all, the ability to maintain a positive culture and a safe work environment is of the highest importance. The foundation of Aesop Auto Parts is what we call “The 4 Keys” — these are traits we esteem, recognize, celebrate and work to uphold:
- We take responsibility
- We work as a team
- We choose a growth mindset
- We serve with care
These “4 keys” represent shared values across all the Aesop facilities and will be the foundation of our success moving forward. If we live by these four keys, we feel confident in our ability to have a world-class company that our employees want to be part of and that our customers love doing business with.
Ryan, at the 2022 ARA convention, in your keynote speech, you said that “auto recyclers are not only in the parts business but also the people business.” Would you like to expand on this and provide an example of how Aesop invests in its staff?
I truly believe that with the challenges we have had over the past two years with hiring, we need to take a moment and realize that we cannot accomplish selling parts without great people. In the past, for all industries, it has been easy to overlook our greatest asset, our people! My statement in the ARA keynote was intended to encourage everyone to reflect on how their employees view their employment and how the company is treating their employees. We need to ensure our employees have a voice and know they are stakeholders within our company.
Aesop is heavily investing in employee benefits and training initiatives. We are also looking for ways to create career advancement opportunities for our employees by promoting from within. People have more choices than ever about where to spend their working lives, and we want to be very intentional about building a culture and company people want to be part of now and for years to come.
So far, Aesop has made ten 10 acquisitions with 17 locations. Do we expect to see more? What is the drive and overall aim to place Aesop on the auto recycling map for the future?
Yes, absolutely. We have always been, and always will be, about driving opportunity. Our industry is growing, and we see tremendous opportunities to grow along with it both organically and by expanding our network of recycling facilities. We have most recently expanded into the Texas market, and we’re actively evaluating additional locations in both new and existing markets.
Finally, is the future bright for auto recycling?
It sure is!
While there are still challenges, there are many opportunities.
If you would like to learn more about Aesop, go to www.aesopauto.com