DealerSocket, Vista Equity Partners in investment talks

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ATLANTIC CITY, N.J. -- The owners of DealerSocket, a leading provider of customer-retention software to dealerships, are in investment talks with Vista Equity Partners, a private equity firm with a minority stake in Reynolds and Reynolds.

A Vista financial infusion would finance growth and new products as well as buy out the DealerSocket equity stake taken in 2008 by Meritech, another private equity company, said Matt Redden, DealerSocket executive vice president of sales and marketing. He was interviewed at the DealerSocket sales booth at the Digital Dealer Conference & Exposition here.

Vista focuses on software companies and has 126 in its portfolio, Redden said. It has a minority stake in Reynolds, one of the two dominant providers of software used to operate dealerships. ADP Dealer Solutions is the other major dealer management software provider.

DealerSocket, of San Clemente, Calif., is majority owned by co-founders Jonathan Ord and Brad Perry.

Today, the company has 425 employees and about 3,800 dealer customers, all but 200 of which are franchised dealers, Redden said. The dealerships have nearly 180,000 users, putting DealerSocket among the largest full-line providers of customer-retention software.

Penske Automotive Group is a major customer, Redden said. Products for dealerships range from in-store desking -- or calculating payments for buyers based on trade-ins, interest rates, down payments and other factors -- and equity mining to customer sales and service notices.

DealerSocket has been increasing revenue at 40 percent annually since 2007, Redden said. He declined to specify revenue.

When Meritech bought into DealerSocket in 2008, the company had sales of about $10 million, Redden said. He said DealerSocket today spends between $16 million and $18 million annually on r&d.

You can reach David Barkholz at dbarkholz@crain.com. -- Follow David on Twitter and


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