Dealertrack to buy Dealer.com in $1 billion deal
Dealertrack Technologies, a leading provider of financial services software to auto dealers, has agreed to purchase digital-marketing giant Dealer.com for about $1 billion.
The acquisition is subject to regulatory approval and is expected to be completed in the first quarter of 2014, Dealertrack said in a statement today. Dealertrack will finance the deal with $620 million in cash and 8.7 million common shares.
The blockbuster deal caps a busy year of investment in auto-retailing vendors that included a $30 million infusion this month into TrueCar Inc. by a company created by Microsoft founder Paul Allen.
Dealer.com, established in 1998, is a leader in hosting Web sites for dealers and helping them with their digital advertising spend, including presenting dealers on Google and other search engines. The company has 830 employees and projected 2013 revenues of $230 million.
Dealertrack connects dealers with financial institutions interested in providing car loans. Through acquisitions, the publicly traded company has diversified into other software products used by dealers, including dealer management systems, customer retention and vehicle inventory management.
Dealer.com says it has about 7,000 dealer customers. Dealertrack’s online credit application network connects more than 20,000 dealers with more than 1,400 lenders.
Dealertrack said it will continue to use the Dealer.com name in the marketplace because of its brand recognition among the automakers and their dealers.
Dealertrack shares closed today at $42.80, putting the price tag of the deal at about $992 million.
In other moves this month, Contact at Once! bought the direct chat business of rival Outsell, while Search Optics, which provides Web site and digital marketing services, got an undisclosed investment from private equity firm Kayne Partners.
The terms of the Contact at Once! acquisition were not disclosed. Direct chat is when an operator offers online help and conversation to a Web site shopper.
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