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BETHESDA, Md. — Can a big luxury fleet company successfully take a boutique business approach?
The answer would have to be ‘yes, no other way’ if you ask Robert Alexander, CEO and owner of RMA Worldwide Chauffeured Transportation of Bethesda, Md., who closed a deal May 10 to buy a large regional competitor, International Limousine Service based in Washington, D.C. The stock purchase and asset acquisition includes International's vehicles, employees, and customer contracts.
The deal vaults RMA to the top of the luxury fleet transportation sector in the D.C. –Baltimore metro region that spans from Central Maryland southwest to Northern and Central Virginia. Although the combined operations now run more than 400 vehicles of every type and employ 550 workers, Alexander, 52, is positioning the 30-year-old company he founded with one sedan to specialize in a diverse array of ground transportation niches.
This latest acquisition demonstrates how in the current ground transportation market the concepts of big and boutique can no longer be separated based on fleet size. One of Alexander’s primary motives for the acquisition is to add more refined layers to RMA’s operations to withstand a market with more specific client needs and demands.
“We have far more scale in the marketplace than we did before, which will create many more opportunities,” Alexander told LCT in an interview May 16. “We are looking at everything because we have the fixed recources for more usage, and can be more competitive.”
RMA already serves clients among sports teams, government agencies, Fortune 500 companies, white shoe law firms, corporate boards, funeral homes, and entertainers. “We’re servicing many different verticals and hope to expand on that,” he said. “We’re making sure everyone on the combined team understands that service is what we live for. It’s not about dollars first; it’s about service. Whether you’re handling an affiliate’s client or a CEO, we’re giving our best every day and doing it as a team.”
RMA has seen revenue grow 42% year over year before it added International Limousine. In early 2017, RMA acquired Reliable Limousine and Bus Service, a competitor in the Maryland-D.C. market. But International is clearly the biggest catch in the company’s history.
“If the market shifts you can tie your boats together in a storm instead of drifting by yourself,” Alexander said. “We will look for other businesses with synergies we can capitalize on.”
Alexander compares the size of this acquisition to one he did in 2004 when RMA bought Private Car of Baltimore and doubled its annual revenues from $4 million to $8 million. The combined RMA-International Limousine operation is expected to reach $65 million in annual revenues. “We’re reinvesting a ton back into the company and are very good with profitability.”
A near-term goal for RMA is to increase its fleet usage and more efficiently plan runs so it can “pare down” its overall fleet numbers from 400+ to 350+, Alexander said. The company has grown rapidly into the motorcoach sector, buying 16 coach buses since 2016. Its fleet now includes every possible type of ground transportation vehicle, including transit buses, ADA vehicles, hearses, and even taxis under a separate Orange Taxi service that Alexander launched in 2011.
RMA plans to stay in the International Limousine building in the district two miles from the U.S. Capitol under a lease agreement with International’s former owner, Richard Kane. The company also plans to open a facility in Richmond, Va., 109 miles to the south along I-95. It recently won a large university contract to run campus-wide shuttles and handle sports team transportation (announcement pending). Alexander said he further plans to assess other market potential for ground transportation in the region.
The move into Richmond could herald future expansion and targeted growth into other cities, Alexander said. “We’re doing more and more national offerings and RFPs because there are fewer choices out there. Through technology and creative solutions, we can be competitive.”
In the last few years, RMA has upped its game in the near-demand transportation market, and can deliver a sedan anywhere in the metro area within 45 minutes notice. “On most days it’s a lot sooner than that and we hope to shrink that time down,” he said.
The acquisition also strengthens RMA’s position in the shuttle market. “It gives us the resources to be more creative in our offerings,” Alexander said.
All RMA and International employees are allowed to stay on with the new venture. “We’re very happy about gaining International Limousine’s talent,” Alexander said. “Everyone gets to keep their job and we look forward to them adding value every day.”
As a veteran large fleet operator and a board director and Treasurer of the National Limousine Association who started his company as a college student in 1988, Alexander has had to adjust and embrace every disruption and change the industry has thrown up over the last three decades.
That means an operator should keep streamlining internal systems, exploit and rely on the efficiencies of technology as much as possible, look for savings, watch spending, and grow top line sales, he said. “Everything and every vehicle has to be profitable. Profitability is number one. Too many companies are not operating at a real profit level.”
Alexander advises operators to always look toward where markets are headed and seek complementary businesses and services. Verticals are another step in the growth game, and most importantly, operators should "manage the cash flow of it all," he said.
“Don’t be a one trick pony. Don’t limit yourself to anything. Be curious in what you need to be. Look for new and better ways to do it. The companies that haven’t evolved and adapted will suffer. Moves we’ve done enable us to benefit from the market that much more.”
LCT related article: RMA Advances On Multiple Fronts In D.C. Market
Related Topics: business deals, business expansion, business growth, client markets, Maryland operators, mergers & acquisitions, revenue growth, RMA, Robert Alexander, Virginia operators, Washington DC operators
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