Chicago-based Cars.com said Tuesday that it has signed an agreement to purchase 100 percent of Accu-Trade's assets, which include Galves Market Data and Made Logistics, for $65 million in cash. The company said it expects the deal to close in about 30 days and that it will pay an earn-out of $63 million based on performance.
Cars.com said acquiring Accu-Trade, which was formed in 2015, offers its dealership customers the ability to buy and sell vehicles, both dealer-to-dealer and consumer-to-dealer. Accu-Trade's technology, including an instant guaranteed offer tool and VIN-based vehicle valuation and appraisal information, will be integrated across Cars.com's online vehicle listings marketplace and dealership websites powered by its Dealer Inspire division.
Cars.com CEO Alex Vetter called sourcing inventory “the No. 1 pain point for dealers today” in an interview with Automotive News, adding that the supply constraints roiling the market have led dealers to find creative ways to acquire vehicles from consumers.
The Accu-Trade technology, combined with Cars.com’s vehicle shopper data, will help dealerships know what they can pay to acquire a vehicle and speed up how fast they can turn their inventory, Vetter said.
“What we've seen from a lot of the Accu-Trade dealers is they've turned their wholesale operation from a loss leader into a profit center,” he said. “They're buying smarter. They're able to be more precise and they're building a profit center for their wholesale operation. As we add in the consumer volume of Cars.com and our dealer websites and bring those consumer opportunities directly to dealerships, we think we can change the game here and allow dealerships to basically be a much more efficient platform unto themselves.”
Jeff Zamora, Accu-Trade's chief technology officer, said the combined companies will give dealerships a transparent, data-driven process when both buying and selling vehicles.
“We allow dealers to log in there, to set up profiles or wish lists of vehicles they’re interested in purchasing on the buyer side,” Zamora said of Accu-Trade’s application. “On the seller side, they certainly can expose their inventory. The system will look and match up vehicles between buyers and sellers.”
Zamora will join Cars.com's leadership team, the company said.