Four days after announcing the purchase of the Tail Light automotive software company, J.D. Power shared another acquisition in the software space on Monday.
This time, the company announced the purchase of We Predict, a UK-based provider of automobile service and warranty analytics software.
Through We Predict’s software, automakers and suppliers are able to gauge future component failures in addition to future warranty claims and costs.
J.D. Power said it will utilize this software to upgrade its vehicle quality and dependability analytics, broaden its repair cost forecasting and offer critical valuation data.
“Robust data and powerful analytics that help manufacturers, suppliers and consumers better predict future repair costs are a key link in the auto industry value chain that will only become more important as fleets of new electric vehicles start rolling off the assembly line,” J.D. Power president and chief executive officer Dave Habiger said in a news release.
“By augmenting our existing offerings with We Predict’s forecasting software, we will be able to deliver a more complete, detailed view of repair-related costs to better anticipate financial risk exposures,” he said.
We Predict CEO James Davies added: “J.D. Power invented the idea of using data and analytics to evaluate vehicle quality and dependability, so the opportunity to become a part of that team and bring our software and operational data into the offering is enormously exciting to all of us at We Predict.
“The industry and consumers need accurate repair cost forecasting now more than ever and we look forward to being the leader in delivering those solutions.”
KAR Global’s blockbuster sale of its ADESA U.S. auto auction business to Carvana has officially closed, KAR said Tuesday morning.
The sale includes include all auction sales, operations and staff at 56 ADESA U.S. vehicle logistics centers in the U.S.
Carvana will also now operate the ADESA.com marketplace in U.S.
The deal was first announced in February.
“We believe the future is digital, and the channel shift towards digital across our industry is gaining momentum. KAR is now better positioned than ever to lead this evolution and capture the broad opportunities ahead,” KAR chief executive officer Peter Kelly said in a news release.
“Our new, more simplified business model allows us to focus our strategy, energy and investments on developing and deploying the digital solutions our customers want, need and value the most,” Kelly said. “We believe expanding our capabilities and the portfolio of services we provide will generate the greatest benefits for those customers, increase our market share and, ultimately, deliver the greatest value to our shareholders.”
KAR will continue to operate its OPENLANE platform, as well as its digital dealer-to-dealer businesses. The latter includes BacklotCars and CARWAVE in the U.S., as well as TradeRev in Canada.
The ADESA Canada, ADESA UK and ADESA Europe businesses, along with KAR's affiliated inspections, transportation and other services brands like AFC, remain part of KAR.
The company will provide more details on its strategy and projections in an analyst day update call, which it anticipates happening next month.
In a news release Tuesday morning, Carvana found and CEO Ernie Garcia said: “This alignment with ADESA U.S. will further strengthen our foundation for growth and provide us with significant flexibility to execute our plan through a wide range of macroeconomic scenarios. Despite the recent industry slowdown, Carvana continues to grow and deliver exceptional experiences to an increasing number of customers.
“We aim to use this ADESA U.S. alignment to both improve the experiences of the ADESA U.S. physical auction customers and to focus on significant and sustainable efficiencies, and unit economic improvements, for Carvana to catapult back into rapid profitable growth as the industry inevitably rebounds.”
ADESA president John Hammer added: “We are committed to ensuring a seamless transition for the ADESA U.S. physical auction customers. We’re excited to collaborate to more positively impact the largest retail sector in the country, especially as we combine our physical auction and retail capabilities to better serve buyers, sellers and consumers across the automotive industry.”
CDK Global has signed a deal to be acquired by Brookfield Business Partners and institutional partners for a total enterprise value of $8.3 billion, with CDK shareholders receiving $54.87 per share once the transaction closes.
That share price is 30% higher than the unaffected closing price on Feb. 18, which was the last full day of trading before “market speculation regarding a potential sale of the company,” CDK said.
The tender offer’s closing is contingent upon certain conditions. One is that the tender of shares represents at least half of CDKs total outstanding shares.
Once the tender offer loses CDK’s common stock won’t be listed on the Nasdaq Global Select Market, and Brookfield will obtain all the remaining shares not tendered in the tender offer through a second-step merger. The price on that will be the same.
The closing of the deal is projected to be in the third quarter.
“This transaction is an exciting next step for CDK that provides our shareholders with both certainty of value and a meaningful premium. It also allows CDK to continue executing our long-term strategy to connect our industry at every level and create an open and collaborative future,” CDK president and chief executive officer Brian Krzanich said in a news release.
“In consultation with our outside advisors, CDK’s Board of Directors carefully evaluated a range of strategic and financial alternatives over several months and determined that this transaction is superior to all other available alternatives,” Krzanich said.
“Brookfield recognizes the unique value our products bring to more than 15,000 retail locations in North America and shares our vision of transforming the future of automotive retail,” he said. “We are excited about the opportunity to further sharpen our focus on elevating the dealer and consumer experience when selling, buying or owning a vehicle. I am grateful for our team’s incredible work in providing an integrated experience — from sourcing to retail sale, and beyond.”
In addition to some more automotive-specific news earlier this month, DrivenIQ, which specializes in data and data technologies that help businesses target their advertising to the most ideal audience, said Friday it has acquired Visitor Data Inc.
In a news release, the company said the main reason it bought Visitor Data was, “for its double opted-in First-Party Data Pixel Technology, which matches mobile device IDs on any website with corresponding names, emails, phone numbers and street addresses.”
DrivenIQ said the deal, “comes at a crucial time as the world trends towards a cookieless future, with major technology companies having recently disabled cookie tracking.”
The multimillion-dollar transaction was backed by Capstone Technologies Group, which previously acquired a minority interest in DrivenIQ and has since invested additional capital.
Albert Thompson, founder and chief executive officer of DrivenIQ explained why having Pixel Technology was so crucial for the company.
“Pixel Technology is essentially caller ID for your website,” Thompson said in a news release. “Our future does not rely on third-party cookies, which makes zero-party data and first-party data paramount for brands, agencies and retailers to reach their ideal customers.
“This acquisition is yet another example of our commitment to build the most robust 1:1 consumer data enhancement platform, where consumers and brands connect and share information directly with each other, while also building a way for all businesses to build and own their own data audiences.”
DrivenIQ to launch trade-in marketplace
In other news from the company, DrivenIQ said earlier this month that it will be launching a trade-in marketplace in June that lets dealers bid and buy live trade-ins directly from consumers.
The company is already taking pre-registration for DriveBid from car dealers.
“DriveBid connects consumers who want the best offer for their trade-in with dealers who need inventory in a real-time, easy-to-use online platform,” said Thompson, the DrivenIQ CEO, in a news release.
“Dealers configure criteria for the vehicles they need and compete with live bids or make cash offers for vehicles that match these criteria,” he said.
“Consumers launch their trades in an open competitive platform, communicate with dealers and get offers for their trades, all in real-time. DriveBid simultaneously captures key vehicle and consumer data to help dealers make smart vehicle buying and inventory management decisions in the future.”
In the release, the company outlined how DriveBid works.
First, the dealer would set up specific criteria for vehicles they’re searching for, designating make/model/year/mileage and geographic parameters.
Meanwhile, the consumer would upload vehicle information on their trade, submit photos, answer a few questions and submit a condition report.
When a vehicle matches the dealer’s criteria, they are sent an alert. The dealer can then compete for the vehicle through live bidding or make an immediate cash offer, based on the format the consumer has chosen
The consumer can see the live offers and see the inventory of active and competing dealers, access dealer info and communicate directly with participating dealers.
Once the consumer has chosen the dealership they want to work with, they can visit that store for a final vehicle inspection.
What a wild season for the used-car market.
In the latest of a string of M&A developments, new entrants to the wholesale market and moves that have generally shaken up the pre-owned landscape, Shift announced Tuesday that it has signed a deal to acquire certain assets of Fair Technologies.
Those assets being Fair’s dealer listing marketplace technology and team — which will give Shift the ability to launch a dealer marketplace product in the second quarter.
The price of the deal would include a combination of cash and shares of Shift’s Class A common stock.
Shift has entered a commitment letter with SoftBank Group, in which SoftBank would purchase senior unsecured notes due in 2025. That will be used to fund the acquisition.
“Shift and Fair share the same goal: to simplify the used vehicle purchasing process and empower customers through the entire lifecycle of car ownership,” Shift co-founder and chief executive George Arison said in a news release.
“At Shift, we’ve long envisioned building a digital marketplace where both dealers and independent sellers can list their cars alongside Shift’s owned inventory, offering customers access to a greater selection of owned and third-party vehicles for a test drive or direct purchase — with all transactions fulfilled through Shift’s proprietary logistics network.”
In the release, Arison said the purchase gets the ball rolling on Shift’s plans for a marketplace and accelerates the launch timeline to the second quarter, “rather than years from now,” he said.
“When launched, the dealer marketplace will expand our inventory assortment, accelerate retail sales growth, and provide further leverage on our marketing and brand investments, among many other benefits we anticipate across the business,” Arison said.
Fair has been building an online market platform the past 18 months that allows consumers to shop cars from dealer partners, line up financing from an in-platform finance provider network and sign for the vehicle digitally.
Dealers would be able to manage the sale through a proprietary digital onboarding platform and schedule home delivery.
“The platform is the ideal solution for dealers to participate strategically in e-commerce, grow market share and develop long-term relationships with customers,” Shift said in the release. “Its technology, team and deeply established dealer relationships will allow Shift to accelerate its vision of becoming the destination marketplace for car ownership.”
It appears the frenetic M&A activity in auto retail has found its way to the wholesale space.
ACV said Monday it has acquired Monk SAS, an imaging and vehicle inspection platform designed to automotive vehicle damage detection through artificial intelligence.
Within the last week, E Automotive Inc. and its EBlock brand have purchased the FastLane Auto Exchange independent auto auction, Carvana has purchased all of the U.S. ADESA auction locations from KAR Global and now ACV is making another move.
And earlier this month, the CARS group annnouced the acqusition of the Accu-Trade group, a move that would give the Cars.com parent a presence in wholesale.
As far as Monday's move, this continues ACV’s recent history of buying tech platforms that augment the company’s portfolio of digital solutions.
Though the acquisition technically closed in the fall, ACV announced the purchase of Drivably last week. That platform helps dealers more efficiently appraise and source vehicles from consumers.
In July, ACV announced the $60 million acquisition of MAX Digital, a move that allowed ACV to offer dealers inventory and pricing guidance as well as merchandising and sales enhancement tools.
As for Monday’s purchase, ACV chief executive officer George Chamoun said: “We are focused on our mission to help our dealer and commercial partners acquire vehicles in the most transparent and efficient manner.
“Monk’s AI-enabled self-inspection capabilities offer a powerful platform that is already live with initial customers in Europe,” Chamoun said.
“Dealers and commercial partners have the marketing resources and expertise to acquire consumers, but they need world-class technologies. ACV’s continued investments in technology make us the perfect partner,” he said. “We could not be more proud to welcome Monk’s talented and passionate teammates to the ACV team.”
Monk co-founders prouder Aboubakr Laraki and Fayçal Slaoui said in the release: “Our team has been delivering industry-leading machine learning models for visual vehicle inspections. By joining forces with the ACV family and leveraging its massive experience of vehicle condition reports, we can truly accelerate our shared goal to offer unprecedented levels of trust and transparency to the automotive market.”
Bringing Monk’s software into the fold broadens the data services offering at ACV, with the goal of providing its dealer and commercial customers an end-to-end experience for offering direct-to-consumer solutions.
“Imaging AI is a strategic addition to our product roadmap as we build the most comprehensive data services platform in the industry. It will be offered both as a stand-alone SaaS offering, as well as integrated into Drivably, MAX Digital and ACV’s inspection applications,” says ACV COO Vikas Mehta. “I have spent significant time with the Monk team and am incredibly impressed with the talent and maturity of their artificial intelligence platform.”
Through a massive acquisition announced Tuesday, Cars.com will be entering the digital remarketing and wholesale vehicle acquisition space, as well as the consumer peer-to-peer market.
Cars.com has agreed to buy the Accu-Trade group that incudes Accu-Trade, Galves Market Data and MADE Logistics for $65 million cash.
The purchase would also include potentially more cash and stock consideration based on financial thresholds. The company expects the deal to close in roughly 30 days.
Among other perks, the purchase gives CARS the technology needed to facilitate digital wholesale transactions on its platform.
“We are excited to enter into the rapidly growing multi-billion-dollar digital vehicle acquisition and remarketing category with Accu-Trade’s best-in-class valuation and appraisal technology,” CARS chief executive officer Alex Vetter said in a news release.
“These solutions will drive better inventory management and maximize profits for dealers while introducing a more efficient option for buying and selling wholesale inventory at scale,” Vetter said.
“We will also empower millions of consumers to confidently and securely sell their vehicles online to the best buyer,” he said. “This acquisition is a further acceleration of our platform strategy and will fuel our end-to-end transaction capabilities for buyers and sellers as well as long-term growth for CARS.”
Dealers will be able to use the CARS platform to buy and sell inventory at scale through both a dealer-to-dealer network and a consumer-to-dealer network. They will also be able to tap into instant guaranteed offer solutions throughout the CARS properties, including the Cars.com marketplace and on websites built by Dealer Inspire.
Dealers will also be able to source used inventory from consumers through the CARS platform via Accu-Trade’s proprietary VIN-specific valuation and appraisal technology.
CARS plans to debut “sell-it-yourself” capabilities for consumers on its marketplace, where private-party sellers can choose to sell to another consumer or a dealer. CARS expects the technology to be integrated with the platform shortly after closing.
North American wholesaler and auto software entrepreneur Robert Hollenshead founded Accu-Trade in 2015. Accu-Trade chief technology officer Jeff Zamora will join CARS leadership team.
“CARS’ strong consumer audience and outstanding network of dealer customers, combined with its proven track record of delivering digital solutions, makes it the ideal match to drive wider adoption of the Accu-Trade platform,” Zamora said in a news release.
“As dealers look for new solutions to optimize inventories and further drive profitability in their businesses, we believe we can quickly scale these assets across the CARS dealer network. On behalf of the entire Accu-Trade team, we look forward to joining the CARS family to help accelerate innovative digital solutions for the auto retail space.”
The CARS extension into digital remarketing, wholesale acquisition and private-party segments would continue what has been a broad expansion of the company’s services in recent years. Cars.com has grown from the vehicle listings/marketplace arena into the dealer ratings and review space, dealer websites, digital retailing, fintech and beyond
The company expanded to the dealer ratings and review space in the summer of 2016 with the acquisition of DealerRater.
Then in February 2018, Cars.com. announced it was purchasing Dealer Inspire — which specializes in dealer websites, digital retailing and messaging platform products — and Launch Digital Marketing, which provides digital automotive marketing services.
In November, Cars.com signed a definitive agreement to buy CreditIQ, a fintech platform that provides instant online auto finance screening and approvals to facilitate online vehicle buying.
The Cars.com purchase also follows another major industry player entering the online wholesale space.
Just last week, CDK Global announced it has launched an online wholesale marketplace called CDK CarSource that is designed to connect dealers to used-car inventories from other dealers across the country.
CarGurus, which traditionally competes in the same marketplace space as Cars.com, edged into wholesale with its purchase of CarOffer, a deal that was completed in early 2021.
Incumbents like Cox Automotive — which owns Kelley Blue Book and Autotrader, rivals to Cars.com and CarGurus — along with KAR Global and Auction Edge are well-entrenched in the online wholesale space.
And once-upstarts ACV and EBlock are now publicly traded and making acquisitions of their own.
Consolidation has been a big theme in the auto industry this year, and a move announced Thursday involved the fleet/lease space.
The combination of Wheels, Inc., and Donlen, LLC has closed, announced Athene Holding Ltd., a financial services company that is the lead investor in the transaction.
Athene had previously purchased Donlen from Hertz Global Holdings for $891 million, a deal that closed in the first quarter.
The chief executive officer of the combined entity will be Shlomo Crandus, currently the chief financial officer of Wheels.
“Today’s announcement is about bringing together two best-in-class fleet management platforms to better serve the growing number of businesses that recognize the financial and operational benefits of outsourcing their fleet and mobility solutions,” Crandus said in a news release.
“Together we can invest in innovative services and technology and deliver a world-class experience to more clients around the globe. We are excited by the opportunities that lie ahead to grow the business with a strong partner like Athene,” he said.
Both Donlen and Wheels will have representatives on the board.
Tom Callahan, the CEO of Donlen, will be a senior executive and board member for the new company.
“We at Donlen have always had great respect for the team at Wheels, and the combination of these two businesses should further the companies’ long-standing goal of providing our customers with best-in-class service,” Callahan said. “I am looking forward to working with the collective teams to ensure that the strong legacy of success that both Wheels and Donlen have built continues as a combined organization.”
With the merger, the combined company will be able to offer mobility solutions to a variety of clients across a wide spectrum, Athene said in a news release.
“More than 80 years ago, my father set out to fill a client’s need which resulted in an innovative solution — the world’s first fleet management company. Since then, we have grown into a global leader in fleet management, working with blue-chip businesses around the world to help make their fleets safer, greener, more productive and cost efficient,” Wheels chairman Jim Frank said.
Wheels CEO Dan Frank added: “Since inception, Wheels has prided itself on providing solutions to meet the evolving needs of our clients. I am incredibly proud of what our team has achieved, and I am equally impressed by the reputation Donlen has built as a fleet manager. Today’s announcement is just the beginning of an exciting journey ahead for these companies.”
The latest acquisition by CDK Global will give dealers an avenue to digitize another piece of the car-buying process: lining up car insurance for the consumer.
CDK said Thursday has signed a deal to purchase insurtech company Salty Dot, Inc., which provides car buyers a mobile solution to acquire car insurance without having to exit the shopping process.
CDK said bringing Salty into the fold not only expands its own digital offerings, but gives dealers a new revenue stream with the auto insurance market, as well.
“In a time of significant retail disruption, CDK is focused on helping dealers and manufacturers meet the evolving demand for simple and convenient retail experiences,” CDK president and chief executive officer Brian Krzanich said in a news release.
“Now that we’ve completely digitized the sales and service processes within the dealership model, we are taking the next step of bringing dealers new capabilities — like Salty’s Embedded Insurance — to help consumers manage the many decisions that come with buying and owning a car,” Krzanich said. “With Salty, we are strategically rethinking the future of auto retail and helping put dealers in command of the entire consumer experience.”
Through Salty’s platform, the consumer would receive a text that includes a link to a form to secure insurance. The platform then uses artificial intelligence to determine the carrier within its network and personalized policy that best suits that consumer based on their answers in the form.
The platform then sends the insurance policy quote to the consumer digitally.
“I am proud of the work the Salty team has done in creating a digital experience that gives consumers a seamless way to buy insurance when its most relevant to them — during the car-buying process,” Salty founder and CEO James Hall said in the release. “By joining an industry leader like CDK, Salty gains instant access to nearly 15,000 retail locations in automotive and related industries which will accelerate the adoption of our platform and fundamentally change the experience consumers have during and after a vehicle purchase.”
This is the third acquisition CDK has announced in 2021.
In June, the company announced it had acquired digital vehicle sales platform Roadster.
In February, CDK said it completed the acquisition of Austin, Texas-based Square Root. The acquisition was said to be an accelerator for Neuron, which CDK says can empower dealers and OEMs to sell and service more vehicles by helping them create more personalized and differentiated customer experiences.
CallRevu announced Tuesday it has purchased the automotive division of CallSource.
Terms of the deal were not disclosed.
“CallRevu has always admired CallSource — we share a common focus on service. This investment was an easy decision as it provides an opportunity for us to deliver greater innovation, insights, and value to our collective customers — reinforcing our position as the industry's only automotive-centric provider,” CallRevu chief executive officer Anthony Giagnacovo said in a news release.
“Welcome to CallRevu, we are excited to show you how important you are to us, and how committed we are to your success.”
CallSource CEO Elliot Leiboff added: “Through many years as peers in the automotive industry, we have had the chance to identify CallRevu as a great company that shares a common set of values with CallSource.
“For this reason, we are confident that CallRevu is the right partner to write the next chapter of growth and innovation for CallSource’s Automotive division,” Leiboff said.
