Group 1 opens 13th Audi store
Group 1 Automotive announced Tuesday that the company has acquired a new Audi dealership in Fort Worth, Texas.
The addition of the new Texas dealership brings Group 1‘s portfolio of Audi dealerships to 13.
Mergers and Acquisitions Archives | Page 19 of 34 | Auto Remarketing
Uses for Carlypso tools at Carvana ‘clear and take many forms’
In buying Carlypso, Carvana got that homeowner’s toolset you might find at the hardware store — the one with all those extra pieces you need for the next job around the house.
Carlypso began as a peer-to-peer car-selling service, eventually becoming a managed marketplace where consumers could access wholesale vehicles directly, Carvana explained in a news release.
Bringing that kind of company into the fold at Carvana — which announced the deal Tuesday, the same day as its latest quarterly earnings were released — gives the Phoenix-based online car retailer some extra torque.
With some of the integration already started, that extra utility should start to arrive this quarter, with “more meaningful benefits” coming in the next year, said Carvana chief executive officer Ernie Garcia.
“Carlypo’s business had been focused on making vehicles at auction available to customers by merchandising and listing those cars on its site, prior to purchasing the cars. This focus caused them to build a toolset that is powerful and highly complementary to our own,” Garcia said during opening remarks of Tuesday’s call with investors.
“Getting high quality vehicle data describing which features, options and packages are on any given car, and valuing those features and options is a notoriously difficult problem in the automotive industry,” he said. “Carlypso built a number of tools that collect and clean vehicle data from many disparate sources, and then analyze that data to properly understand the value of each car.
“The uses for us of these tools are clear and take many forms: automated bidding optimization in vehicle acquisitions across channels, including direct-from-consumer; merchandising inventory with better vehicle descriptions; and price optimization of vehicles available for sale on our site,” Garcia said.
Build vs. buy: More purchases on way?
During the call, the executive team was asked about potential for future acquisitions on the tech front and where buying versus building to obtain additional capabilities might make more sense.
Garcia left the door open for future purchases, but emphasized that it’s not a focal point for the company.
“I don’t want to say anything too definitive here, because I think we will opportunistically kind of look at opportunities as they become available,” Garcia said. “But in general, we don’t anticipate doing a lot of acquisitions.
“We don’t think that’s a big part of our strategy. I think we’d be highly unlikely to do any operating acquisitions or trying to integrate operations. I think an acquisition like this one that is really kind of folding technology into the business in ways that we think are supportive of our core objectives, I think those sorts of acquisitions could occur in the future, but we don’t have anything that we’re looking at today.”
More details on Carlypso
As far as the recent purchase, Carvana has brought Carlypso co-founders Chris Coleman and Nicky Hinrichsen on board into leadership roles. Coleman is heading up vehicle data acquisition and normalization, with Hinrichsen leading wholesale and trade technology.
Each of those co-founders are working with Carvana on strategies for centralized inventory acquisition along instant valuation offers for shoppers who want to trade-in or sell their cars.
That perhaps plays into what Carvana noted about its new acquisition in a news release Tuesday: “Carlypso focused on ingesting, normalizing and organizing data on vehicles that they could not physically inspect, and scaling that process to analyze over 200,000 cars each day,” it said.
“The company developed proprietary big data, analytics, and machine learning tools to dynamically filter, value and price cars nearly instantaneously without ever actually seeing them; tools that can integrate with similarly purposed proprietary technology Carvana has created.”
Coleman, the Carlypso co-founder, added: “When studying wholesale and retail prices in late 2014, we serendipitously discovered abnormally high spreads on some vehicles, which presented amazing deals for our customers. We became obsessed with decoding opaque vehicle data to extreme accuracy in order to find a wider range of inefficiencies in the market.
“We’d transitioned from an online car dealer to a data science company. Bringing our insights to Carvana, the biggest disruptor in our business, meant we could keep innovating with even more horsepower.”
The companies did not disclose terms of the transaction.
Dutch marketing firm makes Canadian acquisition
An online automotive marketing operations based in The Netherlands and out to serve the Canadian, Latin American and European markets made a move to strengthen its North American footprint.
In order to accelerate its development and strengthen its Canadian market presence following the acquisition of DEALERCITY CANADA, Dutch company DEALER Corp. has purchased the trademarks and business operations of AUTO123.com and EVOLIO.
The company highlighted this new acquisition will allow AUTO123.com to offer professionals in the automotive and recreational product industries access to the top experts and largest portfolio of solutions to help them develop and optimize their digital strategy.
Included are online and mobile tools designed to improve sales and marketing performance and provide access to advertising media in Canada from coast to coast.
“I am very proud to see this deal come into effect and enthusiastic about all the possibilities for our clients,” said chief executive officer Marc Somma.
“As part of DEALER, we have all the financial, technological and human resources we need to achieve our ambitions,” Somma continued. “Our development builds on our core philosophy of combining innovation with top-tier expertise to make our clients strong, satisfied performers.”
NY asset management firm acquires 10-store Pittsburgh dealer group
Another large dealership group in Pittsburgh is going through a change in ownership.
A little more than a month after Lithia Motors expanded its operations by securing Baierl Auto Group, GPB Capital announced on Monday that the New York-based asset management firm has acquired a majority stake in Kenny Ross Automotive Group, which operates 10 dealerships in the Pittsburgh metropolitan area.
GPB Capital purchased the majority ownership as part of a recapitalization of nine of Kenny Ross Automotive Group’s dealerships. Terms of the deal, which closed on June 27, were not disclosed.
“Kenny Ross Automotive Group has a meaningful history and solid reputation in Pittsburgh, and their successful dealerships serve as the ideal platform for us to grow our industry presence in western Pennsylvania,” said Manuel Frederico Vianna, managing partner with GPB Capital.
“The franchised auto dealer industry was the largest retail business in the U.S. in 2016, and we are eager to begin working with the Ross family to maximize the potential of these franchises,” Vianna continued in a news release.
The Kenny Ross Automotive Group portfolio includes franchises representing Buick, Cadillac, Chevrolet, Ford, GMC, Mazda, Nissan, Subaru and Toyota.
“Our family has been privileged to serve our friends and neighbors in Pittsburgh for more than 60 years, and we look forward to working closely with GPB Capital to achieve our long-term goals as we enter the next phase of our growth,” said Jimmy Ross, chairman of Kenny Ross Automotive Group.
“GPB Capital is a natural partner for us because their team shares our commitment to our customers, our business, and meeting the needs of local customers and families,” Ross added.
Jeff Lash, Brian Marshall, Brian Brown and Stephen Jones of GPB Capital led the transaction on behalf of the firm. The Presidio Group provided M&A advisory services to Kenny Ross Automotive Group through its wholly owned investment bank, Presidio Merchant Partners.
Jimmy Ross has led the company his father founded in 1954 through 16 dealership acquisitions, and has accumulated more than 40 years of automotive retail experience in the Pittsburgh market.
“We look to partner with proven portfolio companies in order to provide capital and management expertise that enable them to achieve the next level of growth and profitability," said David Gentile, founder and chief executive officer of GPB Capital.
“We focus on income-producing private equity, and Kenny Ross Automotive Group’s proven management team and successful track record are great examples of the key acquisition criteria we look for in every deal that we pursue,” Gentile went on to say.
Lithia’s move was of a similar scale as Baierl operated Acura, Cadillac, Chevrolet, Ford, Honda, Kia, Subaru and Toyota franchises.
LHM acquires 4th Denver Nissan store
Larry H. Miller Dealerships recently acquired a Nissan store in Denver, making the city the group’s largest market outside of its Salt Lake City headquarters.
The Nissan store is located at 2400 W. 104th Avenue in Denver and has been renamed Larry H. Miller Nissan 104th.
This purchase follows four years of continued growth within the Denver market, according to the group.
LHM currently employs more than 1,000 individuals at 13 Colorado locations.
Timeline of Colorado expansion
LHM's Larry H. Miller began his career in Denver as a parts salesman in 1970. By 1987, he opened Larry H. Miller Toyota Boulder, followed by Larry H. Miller Liberty Toyota Colorado Springs a year later and Larry H. Miller Toyota Colorado Springs in 1992.
In the new millennium, the group opened Larry H. Miller Volkswagen Lakewood and Larry H. Miller Nissan Highlands Ranch in 2001 and 2006, respectively.
Larry H. Miller Chrysler Dodge Jeep Ram 104th in Thornton and Larry H. Miller Ford Lakewood opened in 2014. The next year, the group founded the Larry H. Miller Ram Truck Center in Federal Heights.
Last year, LHM returned to the Denver market to open Larry H. Miller Dodge Ram Cherry Creek, Larry H. Miller Colorado Chrysler Jeep and Larry H. Miller Fiat Denver in Aurora; and Larry H. Miller Nissan Southwest in Littleton.
LHM currently operates 61 dealership locations under 20 different automotive brands in seven Western states.
Copart acquires National Powersport Auctions
Having reached 200 locations worldwide and updating its mobile app earlier this year, Copart made another significant move on Monday, announcing that it has acquired Cycle Express, which conducts business primarily as National Powersport Auctions (NPA).
Officials highlighted NPA currently operates facilities in Atlanta, Cincinnati, Dallas, Philadelphia and San Diego. They explained NPA predominantly auctions pre-owned powersports units on behalf of finance companies, dealers and manufacturers.
“We are thrilled that NPA is now part of the Copart family and believe the team’s expertise will enhance our capabilities,” Copart chief executive officer Jay Adair said. “NPA is the leader in the powersports auction industry and shares our ownership mindset, commitment to challenging the norm, and focus on delivering results.”
NPA chief executive officer Cliff Clifford added, “We are very excited about teaming up with Copart.
“Leveraging Copart’s resources and capabilities with NPA’s industry expertise and market leadership will allow us to kick NPA into high gear,” Clifford continued. “We’re looking forward to taking NPA to a whole new level of growth and success.”
2 dealer groups expand footprints in SoCal
SoCal Penske Dealer Group announced it acquired the Fuller Ford, Fuller Honda, Fuller Kia and Fuller Collision Center in Chula Vista, Calif., further expanding its footprint in the Southern California market.
The former Fuller locations have been rebranded as Penske Ford Chula Vista, Penske Honda Chula Vista, Penske Kia Chula Vista and Penske Collision Center Chula Vista.
“Closing this purchase represents a significant milestone for SoCal Penske Dealer Group and gives us deeper roots in the San Diego retail market,” the group’s chief executive officer, Roger Penske Jr., said in a new release. “Fuller Motors is one of the largest employers in the City of Chula Vista.
“A great deal of effort from both sides went into ensuring a smooth transition for the Fuller employees. We are thrilled to now count their employees, guests and neighbors among our friends and family and look forward to developing strong ties to the local community.”
SoCal Penske now has a total of 14 dealerships in Southern California since acquiring the Fuller stores.
Galpin opens exclusive Kia dealership in Southern California
Galpin Motors’ latest franchise, Galpin Kia in North Hills, Calif., is just adjacent to Galpin’s main campus on Roscoe Boulevard and finished last month as the No. 8 Kia dealer in the country.
The new store is the exclusive Kia dealership in San Fernando Valley County and the 12th franchise to join Galpin’s collection of brands, which includes Ford, Lincoln, Mazda, Aston Martin, Honda, Subaru, Volkswagen, Lotus, Volvo, Jaguar and Spyker.
Galpin Kia officially opened in October and its inventory is made up of Kia’s full line of cars and SUVs.
“We couldn’t be more excited about the opening of our Kia dealership,” Galpin Motors president and chief operating officer Beau Boeckmann said in a news release announcing the opening. “I just returned from Seoul, Korea, where I was able to see the amazing Kia factory, its beautiful cars and wonderful designs.
“The automaker has been incredibly successful at building a line of stylish, quality cars that are still attainable for consumers. Having a Korean family, I feel especially honored to add a Korean brand into our Galpin family.”
In addition to its collection of franchises, Galpin Motors also operates its well-known customizing shop, Galpin Auto Sports (GAS). GAS is the former home to MTV’s Pimp My Ride and a popular shop for a number of Hollywood’s elite, according to the group.
Monday at NYSE a ‘defining day’ for Cars.com
![OB170605CARS-16[2]](https://www.autoremarketing.com/wp-content/uploads/2017/06/OB170605CARS-162_0.jpg)
Monday morning was a “surreal” moment for Cars.com chief executive officer Alex Vetter and company.
Cars.com leadership and a handful of dealerships were on hand at the New York Stock Exchange to ring the Opening Bell, in what Vetter calls a “defining day for our company.”
Cars.com wrapped up its spinoff from TEGNA on Thursday and its shares began trading on the NYSE that same day. Shortly after Monday’s Opening Bell, Auto Remarketing caught up with Vetter, who talked by phone from New York.
“It was surreal because we were able to share the day with five of our longest-standing dealer partners. We flew in our longest-standing dealers who have been advertising with us since 1998,” Vetter said.
“And our dealer partners are a huge part of this success, so we wanted to share it with them as a representative sample of our 20,000-dealer network that’s strong, and we’re very grateful and thankful for their support,” he said. “It is a defining day for our company, for sure.”
Those dealers joining Cars.com at NYSE were:
— Todd Cahan, managing partner of Max Madsen Mitsubishi
— Michael Najdzin, president of Park Ave BMW/Acura
— Robert Ourisman, general manager of Ourisman Volkswagen Mazda of Rockville
— Mark Tysinger, president of Tysinger Motor Co.
— Jeff Wood, president of Tom Wood Automotive Group
Their presence with the company for the ceremony was certainly symbolic of the work Cars.com has done and has planned for its dealer partners, said Vetter, a Cars.com founder who has been with the company from the outset and served as its chief executive since November 2014.
“If you look at the stock market today and all the headlines coming out of a Wall Street, it’s about how technology is destroying local retail jobs, local retail economy and you’re seeing many big-box retailers go out of business,” Vetter said.
“We are proud and humbled to be a business that cares deeply about helping local retailers survive and thrive in a digitally driven world,” he said. “And we brought our oldest, longest-standing dealers as a symbol to our commitment that we’re here to help them succeed digitally.”
In fact, the mobile aspect of that digital environment is where Cars.com plans to put a great deal of focus. Over half of the site’s traffic is from mobile, Vetter said.
Asked about the growth opportunities for Cars.com and what the company might look like going forward, Vetter said Cars.com continues to “invest aggressively in our mobile technology,” as mobile is the “best source of sales.”
“If you look at the lead-provider industry,” Vetter said, “Internet leads across our auto industry are closing at anywhere from 5 to 10 percent, yet when people walk into dealerships armed and ready-to-go, dealerships are reporting closing ratios at nearly 40 percent.
“And so we know the highest-quality source of traffic that we can drive our dealer partners is by bringing people physically to their showroom. And we do that using mobile-first technology to help them locate the car they want, the dealer who has it and bring them physically to the store.
“So you can expect a lot more investment there.”
‘The way to sell a car is to show them the car’
Mobile has been a focal point for Cars.com for some time.
At the 2016 NADA Convention & Expo, Cars.com launched its Lot Insights report, which is designed to give dealers a better picture of what consumers are doing on their mobile phones while they are at or near their dealership.
At NADA this year, Cars.com launched new features to Lot Insights, including a VDP Details function. The aim is to show not only the specific vehicle details pages that consumers are view on your lot, but what they’re viewing on the competition’s lot, as well.
Asked, in general, how dealers are utilizing the various mobile offerings of Cars.com, Vetter said: “I think most dealers turn to their CRMs to inform their marketing decisions, but what we’re seeing is progressive dealers are realizing that people are showing up to their showroom using mobile technology. And so we actually are talking to the dealers that we brought here to the New York Stock Exchange about the changing nature of consumer-shopping patterns and how they’re embracing mobile.”
He added: “We’re just now starting to report on same-day delivery of people to the stores. So, now Cars.com can tell a dealership every day how many walk-in shoppers that we’re bringing to their lot who are using Cars.com on their mobile phone when they arrive.
“It’s different. And so it’s going to be a change in how dealers measure and evaluate marketing effectiveness. But again, there’s no better quality than bringing someone physically to test-drive a car to the store.
“I had a great dealer say to me once, ‘the way to sell a car is to show them the car.’ And we’re helping show more cars at the store than ever before.”
Board members a ‘world-class talented team’
Last week, Cars.com also announced a seven-member board of directors, its first as a public company.
That board will be led by Scott Forbes, who is chairman of U.K. online home advertiser company Rightmove and global B2B media company Ascential.
Along with Vetter, also on the board are independent directors Jerri DeVard, Jill Greenthal, Tom Hale, Don McGovern Jr. and Greg Revelle.
“First and foremost, we’re ecstatic to have a world-class talented team of executives helping us set and drive strategy for the company,” Vetter said Monday.
Asked about Forbes, in particular, Vetter pointed to his experience in the travel and real-estate industries, which, like the world of Cars.com, are “two-sided marketplace businesses.”
He also lauded Forbes’ M&A experience, having headed up more than 200 acquisitions and integrations.
“As we look out at our future opportunity, certainly accelerating the growth inorganically is definitely part of our plan,” Vetter said. “And having Scott on the board to help us singularly focus on our business and position in the market, I think only accelerates our growth.”
Growth going forward
That growth, undoubtedly, will involve dealers, as it has for the two decades Cars.com has existed.
In addition to inviting them to stand alongside Cars.com leadership at the NYSE, the company was spending time Monday with the dealers to learn more about how it can help them going forward.
“Look, dealers are the last vestige of true American entrepreneurialism in this country and so we are excited to help them succeed in this digitally driven world today. And no better example of that is our commitment in mobile,” Vetter said.
“The vast majority of consumers’ shopping time is being spent on mobile devices. If you look at our mobile platforms alone, the average user on Cars.com intends to buy a car within six months, but if you isolate just our mobile audience alone, the purchase horizon is nearly 40 days,” Vetter said. “So, this is the last place people shop and when they’re out on the go and we’re helping dealerships move aggressively into this mobile world.”
Asked if this was a shift toward the lower funnel, Vetter said: “The world is moving very fast, and as dealers will tell you, consumers are changing their mind up and to the day they buy the car. Whether they came in for a late-model used car and decide to buy a new car because of manufacturer incentives or didn’t know about the great trade-in that just came on the lot.
“Consumers are using mobile devices to make changes about not only the brands they’re going to buy, but dealership they’re going to buy from up into the day of the decision. So we’re helping them make better decisions about where to buy and what to buy and mobile is an enabler through that whole journey.”
Dealership buy/sell action to be ‘robust’ for rest of 2017
While differing on how first-quarter activity unfolded, both Kerrigan Advisors and Haig Partners shared upbeat assessments of dealership buying and selling activity for the rest of 2017 as each used the adjective, "robust."
First, at Kerrigan Advisors, the firm reported that the action of dealerships changing hands “remains robust” for Q1 in spite of slowing vehicle sales and a slight dip in Blue Sky Values. According to The Blue Sky Report, a Kerrigan Quarterly, any negative headwinds are being offset by high dealership real estate prices.
Outpaced by the private companies in acquisition activity, Kerrigan Advisors indicated that publicly traded dealer groups are directing their focus to non-U.S. acquisitions. According to the report, macro-economic conditions, which offer opportunities for both optimism and pessimism, are contributing to a high level of activity in the buy/sell market, which is expected to continue throughout the year.
Kerrigan Advisors managing director Erin Kerrigan said, “2017’s buy/sell market is fueled by diverging viewpoints from conservative sellers and ambitious buyers — and is influenced by consistently high real estate valuations. Those confident in the long-term health of auto retail continue to seek acquisitions and investments.
“By contrast, the pessimists, and those who are generationally ready to go out on a high note, are increasingly choosing to exit the market, selling their dealerships at today’s high prices and avoiding a potential downturn. All of which contributes to a very active and robust buy/sell market,” Kerrigan continued in a news release.
Other key findings from Kerrigan Advisors’ Q1 2017 report include:
—Dealership real estate prices and rents rose considerably on a quarter over quarter basis. Real estate, for most dealers, is their highest value asset, far exceeding franchise value.
—Transaction activity increased slightly in the first quarter of 2017, exceeding 2015 and 2016’s high pace with 60 dealership buy/sell transactions completed in the quarter.
—2017 is tracking towards 240 transactions for the year.
—The number of multi-dealership transactions declined from 19 to 11. Kerrigan Advisors expects the pace of multi-dealership transactions to increase considerably as the year progresses.
—Public retailers’ acquisition spending decreased 12 percent. Since January, The Kerrigan Index, which includes the seven public auto retailers, is down 9.6 percent to 492, underperforming the S&P 500.
—The private sector acquired 93 percent of the franchises sold in the first quarter of 2017.
—Domestics continued to grow their share of the buy/sell market — a trend driven by the growing market share of trucks and SUVs.
—Import luxury franchises’ share of the buy/sell market declined by 45 percent.
The report also identified the following three market trends, which Kerrigan Advisors expects to affect the buy/sell market in 2017 and beyond. That group includes:
—Dealership profit plateau shifts buyer’s focus to current earnings
—OEMs’ buy/sell approval processes differ significantly
—Multiple arbitrage for dealership business lines continues
“Overall, we continue to expect 2017 to be a very active year for buy/sells with private buyers, new entrants and certain public buyers eager to put their capital to work. An increasing number of sellers are coming to market motivated by current prices and a strong desire to capitalize on today’s buy/sell activity,” Kerrigan said.
The view from Haig Partners
Meanwhile, Haig Partners reported that the number of dealerships sold in the U.S. declined 29 percent from 113 rooftops in Q1 2016 to 80 rooftops in Q1 2017, according to data published in the Q1 2017 edition of The Haig Report.
The firm explained this decline may have been partly because of the uncertainty caused by the presidential election in the fall of 2016. Haig Partners indicated buyers were uncertain if Congress would pass tariffs that would raise the costs of most autos sold in the U.S., or if taxes would be cut, thereby leaving more proceeds for sellers.
The report goes on to mention buyers are also increasingly concerned about future profits at dealerships so they are proceeding cautiously. And some sellers have not yet adjusted to new market conditions and may be asking too much for their dealerships.
Continuing the trend from 2016, Haig Partners noted demand for dealerships shifted from luxury and import brands to domestic brands that are heavier in trucks and SUVs. Purchases of domestic dealerships comprised 49 percent of total purchases in Q1, up from 43 percent in 2016.
Purchases of luxury dealerships were just 14 percent in Q1, down from 22 percent in 2016.
Haig Partners’ franchise blue sky multiples were unchanged in Q1.
Other key findings from the Q1 2017 Haig Report include:
—Macroeconomic indicators such as GDP, interest rates, employment, number of miles driven and consumer sentiment remain highly favorable for dealers.
—Other trends such as used car pricing, incentive spending by the OEMs, and rising inventories are growing less favorable to dealers.
—Retail sales are flat for the first four months of the year, although total sales, including fleet, fell by 2.4 percent.
—Declines in new and used gross profits per vehicle are being offset by gains in F&I and fixed operations.
—Sales and gross profits continue to increase at dealerships, but expenses are rising faster.
—Average profits per dealership fell 8.5 percent in Q1 2017 from Q1 2016. The average dealership pre-tax profit over the last 12 months was $1.437 million.
—Average estimated blue sky value per dealership dipped 2 percent from the end of 2016 to $6.92 million.
—Public auto retailers are spending more of their capital outside of core U.S. franchised vehicle dealerships, including stand-alone used car stores, international acquisitions and collision centers.
—Private equity firms and family offices continue to make substantial investments in auto retail.
Haig Partners pointed out that President Trump’s proposed plan to tax pass through entities like most dealerships would increase the amount of after tax income to many dealers by an estimated 24 percent to 35 percent, thereby raising the value of dealerships.
If passed, the firm said dealership values should remain stable or rise, even if pre-tax profits continue to drift lower.
“Despite the sharp dip in the first quarter, we expect dealership sales for the rest of 2017 to be robust,” Haig Partners president Alan Haig said. “There are many buyers, financing is still readily available, and more sellers are realizing that if they want to sell their dealerships before the next recession they will likely need to accept today's offer since tomorrow's offer could be lower.”
Haig Partners is seeing these conditions in its current engagements that include domestic, import and luxury dealerships that range from Florida to New York to California. The value of the transactions they have closed over the past two and a half years is approximately $900 million, including two of the largest transactions of 2016, so they have unique insights into current market conditions and how they impact dealership values.
More details
The Blue Sky Report, a Kerrigan Quarterly, is published four times a year and includes Kerrigan Advisors’ signature blue sky charts, multiples and analysis for each franchise in the luxury and non-luxury segments. The multiples are based on Kerrigan Advisors’ view of franchise values in the current buy/sell market and can be applied to adjusted pre-tax dealership earnings to estimate blue sky value. To download the report, click here.
The Haig Report is published each quarter and is a valued source of information to many in the auto industry who look to it for its comprehensive data, analyses and opinions about the auto retail industry. Included in each edition are Haig Partners' blue sky multiples that serve as a gauge for franchise values. To download the report, click here.
Cars.com spin-off complete, company announces board
Cars.com has wrapped up its spinoff from TEGNA and its shares began trading on the New York Stock Exchange on Thursday.
The company also announced a seven-member board of directors, its first as a public company.
“This is an exciting moment in Cars.com’s history,” chief executive officer Alex Vetter said in a news release.
“This caliber of leadership and expertise of our board of directors, and their singular focus on Cars.com, will help us drive transformational growth throughout our company and help ensure our sustainability as a leading brand in the marketplace for online car buyers and sellers,” he said.
That board will be led by Scott Forbes, who is chairman of UK online home advertiser company Rightmove and global B2B media company Ascential.
Along with Vetter, also on the board are independent directors Jerri DeVard, Jill Greenthal, Tom Hale, Don McGovern Jr. and Greg Revelle.
“Cars.com is on an incredible journey, primed for expansion and growth. This is a talented board of experts assembled from across the online consumer marketplace that will help guide Cars.com with greater financial, operational and strategic focus,” Cars.com chief financial officer Becky Sheehan said in the release.
Vetter will be joined by the Cars.com leadership team and several longtime dealer partners to ring the Opening Day Bell on the NYSE on Monday.
“I would like to thank Gracia Martore, president and chief executive officer of TEGNA, and the TEGNA board of directors, for their expert leadership and guidance to Cars.com,” Vetter said. “Working with Gracia and the board for the past three years has provided us with a benchmark for success that has helped us get here. Today, we enter the market as an independent business that will continue to be a leading branded player in the digital automotive marketplace.”
Cars.com had made a one-time $650 million cash distribution to TEGNA before the separation and entered into a new credit facilities.
The borrowing capacity on those facilities is $900 million. Cars.com plans on investing in “organic growth initiatives and selective acquisitions.”
The spin-off was done through a tax-free distribution of all issued and outstanding shares of common stock in Cars.com to TEGNA shareholders, who each got one share of Cars.com common stock for every three shares of TEGNA common stock they had (as of May 18).
