Autobytel acquires lead wholesaler AutoUSA from AutoNation
Autobytel Inc., one of the largest providers of lead prospects to auto dealers, has purchased AutoUSA from AutoNation Inc. for $10 million in cash, a $1 million convertible note and other consideration.
AutoUSA is a wholesaler of leads, meaning that it buys leads from generators such as Autobytel and resells them to dealers. The company posted revenue of about $30 million in 2013, selling leads and other services to about 2,000 dealers, including stores owned by AutoNation, the nation's largest dealership group.
Publicly traded Autobytel announced the deal on Monday. It is nearly triple the size of AutoUSA, posting revenue of about $57.7 million through the first nine months of 2013 ended Sept. 30.
Autobytel generates the vast majority of the leads it sells to dealers and most automakers through its own Web sites, Autobytel.com and Car.com, as well as through paid search advertising. Autobytel sells leads, or contact information left by online car shoppers, to about 3,800 dealers, said CEO Jeff Coats. That number jumps to about 5,200 as a result of the AutoUSA acquisition, he said.
Autobytel, which announces its full-year 2013 earnings next month, sold about 5 million leads last year, Coats said.
The AutoUSA acquisition continues a string of deals among digital marketing vendors to the industry. The granddaddy was the nearly $1 billion purchase by Dealertrack Technologies of Web site and digital-marketing giant, Dealer.com, announced last month.
Coats said there's room for additional consolidation among vehicle lead providers with hyper-competition causing even reputable vendors such as AutoUSA to post flat sales in 2013 vs. 2012.
In addition to the $10 million in cash and the convertible bond, AutoNation received warrants or the rights to purchase about $1 million of Autobytel common shares at an exercise price reflecting a 5 percent premium over the Autobytel stock price at the close date of the deal.
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