Dealership software giant CDK Global Inc. agreed to acquire ELEAD1ONE, a provider of customer relationship management, service and marketing solutions.
While ELEAD1ONE maintains a vast portfolio of dealership products, the company's CRM platform, in particular, will be highly complementary to CDK's business as it looks to fortify its position as a conduit of end-to-end automotive commerce.
“As we looked at how best to rapidly address the needs of dealers in today’s evolving marketplace, we determined that ELEAD1ONE’s centerpiece CRM offering and fully integrated suite of layered applications fit well with our diversified product offerings,” CDK Chief Executive Officer Brian MacDonald said in a statement Monday.
“In addition, ELEAD1ONE’s well-regarded customer service capabilities will complement our focus on delivering an outstanding experience to its dealer customers."
CDK, pending approval from the Federal Trade Commission, will acquire 100 percent of ELEAD1ONE. The deal has been in the works for around a year, a source familiar with the transaction told Automotive News, which first reported the plans on Sunday.
"When you look at what has made ELEAD1ONE so unique, it's essentially a fully integrated platform that combines CRM with sales and service and marketing and a contact center that's all integrated into a single dashboard," the source said. "CRM has clearly evolved in automotive."
Terms of the transaction were not disclosed. It remains subject to typical closing conditions.
An ELEAD1ONE source familiar with the negotiations said it wasn't the first time a company has made a pitch to acquire the software provider. But the company felt CDK was the ideal partner this time around.
"The integrations, the resources they'll bring to the table as far as people resources, technology resources," the source said. "Everything we'll share in common from our account base, made it the right time."
CDK, based in Hoffman Estates, Ill., has been planting a major stake in the digitized future of car sales. Websites built on CDK's platform, which draw around 14 million monthly visitors, are becoming digital commerce hubs. Through CDK's Connected Store platform that was developed in-house, consumers can get accurate price quotes and structure deals before going to dealerships, thus streamlining the purchase process on dealer sites.
CDK also controls a significant chunk of the dealership management system market with rival Reynolds and Reynolds.
CDK is no stranger to acquisitions. CDK Service, a tool acquired from Superior Integrated Solutions around six years ago, enables service advisers to complete walkaround inspections with a tablet and makes passing a customer to another adviser seamless.
But not all of the company's recent deals have been approved. In March, CDK terminated a planned acquisition of DMS provider Auto/Mate after FTC opposition.
CDK and Auto/Mate signed an agreement in April 2017 outlining terms of a sale, subject to FTC approval. But after an 11-month review, Auto/Mate said "the FTC decided that it was in the best interest of auto dealers to have Auto/Mate remain as a strong competitor in the marketplace."
ELEAD1ONE, headquartered in North Valdosta, Ga., made headlines in Feb. 2017 after an employee concocted a hoax that spooked DMS companies.
The employee circulated what appeared to be a ransom email from hackers, which said they had breached the company's CRM system and were going to release Reynolds, CDK and Dealertrack data from three to four dealership groups. In reality, no breaches had occurred.
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