The leading supplier of electronic parts catalogs to auto dealers could be sold. Its parent company seeks to reduce debt and address other problems.
ProQuest Co., an educational publisher in Ann Arbor, Mich., says it may spin off its automotive business unit, called ProQuest Business Solutions.
The prospective sale is having little impact on dealers. "Life goes on unaffected for us," said Jerry Baracz, CFO of ProQuest Business Solutions. "The automotive side of the business is profitable."
ProQuest Business Solutions reported unaudited revenue of $183.0 million in 2005. The division earned $54.9 million last year before interest, taxes, depreciation and amortization.
But its parent company faces challenges. ProQuest recently renegotiated credit agreements with lenders to get more operating money after it incurred substantial debt from acquisitions.
The company also said it mistakenly inflated earnings. It had to restate financial results for fiscal years 2000 to 2004 and the first three quarters of 2005.
ProQuest says it expects to complete an investigation of the accounting errors in several weeks.
Paul MacDonald, a dealer computer consultant in Hays, Kan., said ProQuest's auto division should lure many suitors, primarily vendors of dealer management systems.
The division dominates the electronic parts-catalog business. It offers other global information services to dealers and automakers. ProQuest's Web site says the company serves 30 automotive brands from 20 car companies.
MacDonald estimates that ProQuest has at least a 90 percent share of the electronic parts-catalog business in the United States.
"It's virtually the only game in town," MacDonald told Automotive News.
"It has exclusive contracts with many auto manufacturers."
You may e-mail Donna Harris at [email protected]