Dealer software giant CDK Global Inc. has struck a deal to acquire Auto/Mate, a smaller rival in the dealership management system market, the companies said Wednesday.
The plan is for CDK to "integrate the Auto/Mate DMS into its product lineup to better address the full spectrum of dealership needs, providing dealers with the choice and flexibility to combine the Auto/Mate DMS product offerings with fully integrated access to the CDK solution suite," according to a statement from both companies.
CDK, which already counts large dealership groups such as AutoNation Inc. among its clients, says the acquisition will expand its reach among smaller dealerships.
When the deal is finalized, CDK says Auto/Mate’s DMS initially will be a third option in its lineup. CDK currently markets the DASH platform as its low-cost DMS, as well as its core DRIVE product.
Over time, CDK will migrate DASH customers to the Auto/Mate system “in a way that is convenient for those customers,” Brian MacDonald, CDK’s CEO, told Automotive News.
MacDonald said there are no plans to rebrand Auto/Mate. The Auto/Mate brand, MacDonald said, is “well recognized and respected in the marketplace,” so CDK will keep the name.
“Auto/Mate put itself up for sale a few months ago and went through a traditional sales process,” MacDonald said. “We think that Auto/Mate gives us a product to service smaller footprint dealers and bring our combination of layered apps, websites and other digital assets to smaller footprint dealers that we think are often underserved.”
Auto/Mate, a privately held company in Albany, N.Y., has more than 1,000 new-car dealerships using its DMS products.
CDK, of Chicago, and fellow software giant Reynolds and Reynolds, of Dayton, Ohio, control more than 70 percent of the DMS market. Now CDK has extended its reach into more stores.
The transaction, expected to close this summer, has been approved by each company's board of directors but is subject to customary closing requirements and regulatory approvals. Terms were undisclosed.
Auto/Mate CEO Mike Esposito said in the statement: "I am confident the traditions of unparalleled customer service and ever-evolving technology that Auto/Mate customers have grown to expect will continue under CDK, and we are excited for the new opportunities that the combined companies will provide to help our customers succeed."
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