Inside the Merger That Created StoneEagle F&I

On Feb. 19, the P&A world learned that two of its leading technology providers, F&I Administration Solutions LLC and StoneEagle Inc., had merged to form StoneEagle F&I. In the announcement, the former competitors claimed a combined annual tally of 8 million transactions for 85 F&I product administrators and a network of more than 10,000 dealerships. 

The competition between the companies goes back 10 years, when David Trinder and Kumar Kathinokkula bought the SCS Auto platform from Dealertrack and founded F&I Admin. Cindy Allen helped build StoneEagle into a powerhouse alongside Brent Allen (her husband) and his brother, Bobby Allen, whose family founded the company in 1987. Cindy returned as CEO in 2017 and will continue in that role with StoneEagle F&I, Kathinokkula will serve as COO, and Trinder and Brent Allen will be board members and executive directors. 

P&A caught up with Cindy Allen and David Trinder to get the inside scoop on the merger and the course they have set for the new company. 

An Easy Decision

Allen and Trinder agree that, as mergers go, the transaction that created StoneEagle F&I was fairly easy to complete. One reason is the fact that no money changed hands and no facilities closed; no moves are planned for the teams of 50-plus associates working at the former F&I Admin’s Chicagoland offices or the former StoneEagle Inc.’s Dallas-area headquarters. 

But the main reasons were a shared vision for the industry and the fact that the groundwork for the merger had already been laid, at least in the abstract, in discussions that took place over the years in which the companies competed and regularly connected. 

“I would call ourselves very healthy competitors,” Trinder says. “The StoneEagle menu gets rates from us. We’ve never shied away from connecting with their products where we could, and that was the only place it was possible. We met at every conference and have always had good discussions together — about the industry, and often as candid as where we’re taking the companies. And there has always been talk about getting together.”

“Brent, David, and Kumar have long been friendly competitors,” Allen adds. “Keeping in touch is important. And our serving similar clientele sets the stage for both groups feeling the same kind of pressure and triumph. … After we would sit down, have a conversation, and peel another layer off the onion, we would walk away saying, ‘That was remarkably natural. We fit really well together.’ And that became more and more apparent.” 

Allen recalls the first “serious” talk of a merger began two or three years ago. The decision to join forces was made in mid-December and completed in short order. 

“Eight weeks, with most of that time spent on due diligence,” Trinder says. “It’s been remarkable how easy a lot of the decisions have been. Cindy is CEO, Kumar is COO. All of that really fell into place. We didn’t hit any roadblocks, and I think that’s testimony to the relationship we have built over the years. We are remarkably similar in how we think.”

Life Just Got More Difficult

Allen returned to StoneEagle as CEO in October 2017 after serving in executive leadership positions with American Express Global Business Travel and GDSX Ltd. (now Concur). Trinder makes no bones about his reaction to the news. 

“I thought, ‘Ugh, darn it,’” he says now. “I have a lot of respect for Brent and the whole team, but I knew Cindy has some special qualities — the way she thinks, very determined — and I knew her rejoining StoneEagle would make life more difficult for F&I Admin. And now that I’ve gotten to know her, I was right.”

“When you see your competitor consistently knock down deals, closing business with one company right after the other, you have to sit up and take notice,” Allen says of Trinder and Kathinokkula. “The F&I Admin system answers a really critical need for product providers, and the decisions that built it were not made quickly. When you play golf with your best friend, you want to beat them, but you’ll enjoy it all the same.StoneEagle wanted to win, but we enjoyed a really good, competitive, friendly relationship for a long time.”

To halt the progress of technology developed by either group would be a disservice to the new company’s combined customer base, Allen adds, and there are no plans to divert resources from any platform. “The solutions we provide are very critical to clients and the inner workings of their businesses. They chose their technology for very specific reasons. Our plans are to continue to evolve all our platforms, especially in the product administration stack.”

It’s “business as usual” for customers, who will continue to get the same level of support they’re accustomed to from the same people they know, Trinder stresses. 

“The only exception is on the dealer reporting side,” he adds. “SEcureMetrics is a strong product used by over 5,000 dealers. I’ve personally watched their support capability and it is truly impressive. It doesn’t make sense for the F&I Admin product to try to compete. But all other products, including the clearFI reporting platform for agents and administrators, will continue.”

Face Time Is Critical

Allen describes her leadership style as “hands-on” and says she and Kathinokkula have already begun traveling to each other’s offices. 

“That kind of face time is really critical, and not just for me and Kumar,” she says. “The teams are actually spending quite a bit of time together already since the merger was finalized, and we’re spending time with clients as well. And a little bit more travel is worth every single moment, I’d say.”

“In the early stages, when we talked about our respective development pipelines, it was amazing,” Trinder says. “There was about a 70% to 75% overlap in terms of where each of us wanted to take the industry. Instead of two companies fighting against each other, we’re pooling resources and making it work on every system. We develop and release things the industry needs to move forward has just increased.”

Trinder was CEO of F&I Admin and Brent Allen was COO of StoneEagle Inc. Asked whether their new status as board members signaled reduced roles — or edging toward retirement — Trinder was unequivocal. 

“We are both going to remain very engaged in the company. Cindy is the CEO. She is going to perform that role and I’m incredibly pleased with how she’s taken it on. But I will remain engaged where it makes the most sense. This is going to be my full-time job for as long as I can perceive.”

Allen believes it would be “shortsighted” to allow either executive to step back, noting their complementary backgrounds and experience running organizations building enterprise-leveltechnology. “Brent comes from the development world. He has that engineering mindset, a deep understanding of meeting business needs in a way that’s sustainable and flexible. We definitely need that. David plays the same role, not from a technology perspective, but from the CEO chair, and he brings that flavor into the conversation.”

Brent “might take a night or weekend off occasionally,” she adds. 

“And I will be taking a couple of bike vacations,” says Trinder. “But that’s all.” 

Watch the Space

The executives hinted at upcoming releases that will leverage both teams’ brainpower and industry savvy. Allen promises “even more innovation around the corner,” stopping short of sharing details or release dates but stressing the first few months of the new company’s existence have already demonstrated the power of complementary perspectives. 

“The long and short of it is the combined strength of these two teams is phenomenal. And the impact that can have on continuing to scale technologies and teams is second to none in our industry,” she says. “Consider the knowledge and experience brought together in this merger. There’s not another organization in this industry that can parallel that.”

F&I Admin and StoneEagle Inc. were both devoted to the full lifecycle of F&I products and their end users, Allen adds, moving along nearly parallel tracks in the development of their administration and reporting solutions. 

“At the end of the day, you can buy new tech and invest in new people,” she says. “But finding those who truly understand what we’re doing? That’s the really hard part.”

“The more we’ve sat and thought about what we can do together, the more exciting it has become for everyone involved,” Trinder says. “So what I’d like everyone to do is watch this space, because there’s so much we are going to do that’s going to have a very positive impact on this industry, and you’re going to start seeing that very soon.