It’s no surprise that J.D. Power and Associates—the outfit that cut its teeth on automotive industry ratings—moved its headquarters to Costa Mesa last fall.
Seven auto brands have established their North American headquarters in Orange County, including Japan- and South Korea-based conventional manufacturers, luxury marques Karma Automotive LLC and Aston Martin Americas, and newcomer Genesis Motors USA, a high-end spinoff from Hyundai.
“Costa Mesa is a great location with close proximity to many important clients, and an important area to recruit top-notch talent,” said J.D. Power Chief Executive Finbarr O’Neill, for whom the move was somewhat of a homecoming. He joined Hyundai as general counsel for its Fountain Valley-based U.S. operations in 1985 and was its chief executive from 1998 to 2003.
It was O’Neill who orchestrated a turnaround of the brand’s image that included its “America’s Best” warranty offering. He went on to serve as chief executive of Mitsubishi Motors North America in Cypress from 2003 to 2005.
J.D. Power, founded in 1968 and based in Westlake Village, Calif., until its recent move, conducts independent consumer surveys of product and service quality and customer satisfaction. It works in the automotive, financial services, healthcare, insurance, energy, telecommunications and other industries, and has become famous for its Power Circle Ratings.
The company also works on behalf of corporate clients to analyze consumer preference data in ways that help drive and define brand strategies worldwide.
It has more than 800 employees at 17 offices globally, including 75 on the 13th floor of 3200 Park Center Drive in Costa Mesa—Hyundai’s former headquarters space.
Its corporate trek south to OC coincided with an Oct. 30 announcement of plans to spin off from McGraw Hill Financial Inc., its then-parent company, which is now known as S&P Global.
The XIO Group—a London-based investment firm with operations in Germany, Switzerland, Israel, Hong Kong and mainland China—emerged as the buyer of the J.D. Power operations in a $1.1 billion deal.
XIO got a globally known brand with annual revenue estimated at around $350 million. J.D. Power’s operating profit last year was $53 million, up from $44 million in 2014 and $35 million in 2013.
Humble Beginnings
The strong earnings and big price tag are a long way from 1968 and the brand’s humble beginnings in Dave and Julie Power’s kitchen in Calabasas in northern Los Angeles County.
The couple signed Toyota Motor Co. as their first client in 1969, and in 1981 launched the U.S. Customer Service Index Study, which is ongoing. Subaru of America Inc. in 1984 was the first automaker to feature its J.D. Power rankings in a TV commercial.
These days, more than 200,000 TV ads each year refer to the coveted awards.
Competitor Kelley Blue Book Co. in Irvine offers similar accolades and ratings for the automotive industry only.
J.D. Power set up its headquarters in Westlake Village in 2002 and has since expanded its operations to Asia, Australia, South America and Europe.
Now it’s looking to XIO to help take it to the next level.
The new ownership put J.D. Power under the umbrella of a “firm with the resources and motivation we need to accelerate our growth, bolster our competitive position, and broaden our global footprint,” O’Neill said in a statement. “We believe that XIO is the ideal partner to help us expand our data and analytics capabilities globally, enhancing our customer solutions and meeting our clients’ needs in an increasingly mobile, connected world.”
XIO said its strategy centers on investing in “businesses located across North America and Europe, [to] help these companies to capitalize on untapped opportunities in fast growing markets, particularly in Asia.”
US Debut
The J.D. Power deal is XIO’s first foray into the U.S.
It acquired specialty chemical and fertilizer maker COMPO Expert in Germany and medical device maker Lumenis in Israel last year.
The J.D. Power acquisition was part of XIO’s plan to invest “$5 billion of committed capital” on “global transactions.”
It’s also its first turn in consumer marketing, although XIO Chief Executive Joseph Pacini sounds undaunted.
“J.D. Power has built a unique and trusted brand for over 40 years and we are extremely optimistic about the long-term prospects of the company,” Pacini said in statement when the deal was announced in April. “The world-class management team of J.D. Power has continuously developed data-driven solutions for its blue-chip customers in order to help them better respond to consumer preferences in increasingly competitive markets. We are committed to investing in the business to keep developing innovative solutions for the company’s customers as well as expanding its presence in international markets.”
