Cox Automotive Inc. President Sandy Schwartz has heard dealers fret that, following Cox's $4 billion purchase of Dealertrack Technologies Inc., the new entity will start jacking up prices.
Don't worry, he says. The purchase closed last week.
Schwartz is asking those dealer customers to judge the combined entity by how it executes the integration and whether they really see major price increases, given the ultracompetitive market for dealer software and digital media.
"It's all about how we behave," Schwartz said.
Schwartz and Dealertrack CEO Mark O'Neil will be going on the road together over the next two weeks to meet with auto retailers to assuage dealer worries and communicate the new vision for Cox Automotive. O'Neil and his executive team are staying on at the combined entity.
The tie-up of Cox Automotive with Dealertrack creates a software and marketing giant with annual sales of about $6 billion. Even so, the companies are complementary, with few overlapping product and service lines.
Cox Automotive contributes to the merger brands that are well-known to dealers, such as Manheim, AutoTrader.com, Kelley Blue Book, vAuto, VinSolutions and Xtime.
Dealertrack is the established leader in lending software. It also offers digital marketing through its Dealer.com unit and retail tools that allow dealerships to offer vehicle shoppers the ability to complete most of a transaction online.
The $4 billion cash deal took more than two months to close because of an extensive antitrust vetting by the U.S. Department of Justice. With the $4 billion, Cox Automotive bought out Dealertrack's publicly traded common shares at $63.25 per share.
To gain the Justice Department's approval, Dealertrack agreed to sell its inventory-management software business, called Inventory+, to DealerSocket Inc. for $55 million in cash.