Dealertrack Technologies Inc. has moved to clear a regulatory impediment to its merger with Cox Automotive by agreeing to sell its inventory-management software business to DealerSocket for $55 million in cash, Dealertrack said today.
DealerSocket, a major provider of customer relationship management software, has been in acquisition mode in recent months. It has bought two companies that sell store operating software to used-car dealerships and now the Dealertrack unit.
Inventory-management software helps dealerships buy and price used vehicles by giving staff visibility into what similar vehicles in their markets are fetching.
Dealertrack is selling the unit, called Inventory+, to remove a potential sticking point in its merger with Cox Automotive, a deal currently under anti-trust review by the U.S. Department of Justice. In June, Cox Automotive agreed to buy publicly traded Dealertrack for $4 billion in cash.
DealerSocket said that after the purchase Inventory+ would remain in Dallas and run independently from the rest of the DealerSocket product suite.
Cox Automotive already has the industry’s largest inventory-management software unit in its vAuto subsidiary. VAuto has about 7,500 dealership customers vs. about 2,000 for Dealertrack’s inventory management business, which was created following earlier acquisitions of AAX and eCarList.
Except for the significant overlap in inventory-management software, the merging companies largely have complementary, not overlapping, technology. Cox Automotive has auction giant Manheim, vehicle shopping sites Autotrader.com and Kelley Blue Book, and a host of software businesses.
Dealertrack is the leader in finance and insurance software, has developed online retail tools for dealers to offer customers online vehicle buying and owns website and digital marketing giant Dealer.com.
In its release today, Dealertrack said it is working with the Justice Department to gain approval for its Cox merger as well as the sale of the inventory unit. Both transactions are expected to close in the third quarter.
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