Urban Science announced it has purchased AutoHook, a provider of digital marketing solutions that was formerly a division of HookLogic.
Urban Science, which provides analytical solutions to automakers and their dealers, said that with AutoHook coming into the fold, the company can now provide dealers and OEMs with the ability to offer real-time incentives via dealer websites, email, mobile, direct mail and third-party websites.
AutoHook’s digital marketing solutions will remain available, and the company and its employees are moving to Urban Science’s Detroit headquarters. David Metter becomes part of the Urban Science team as president of AutoHook.
“My team and I are very excited to join Urban Science. We see the combination of Urban Science and AutoHook as a real growth opportunity,” said Metter. “No one in the industry has a more proven track record in solving the automotive industry’s biggest challenges. It’s all about data, and Urban Science not only has the most, but they can do the most with it.
“This acquisition is a game changer in that we are enhancing digital conversions, but more importantly, taking it to the next level by attributing those conversions to sales in near real time," Metter continued. "No one else can do that.”
Urban Science founder, president and chief executive officer Jim Anderson said: “AutoHook is an important addition to Urban Science. We are breaking new ground in helping dealers drive their business performance in near real-time. Bringing science to retail has allowed our clients to achieve high sales and high profit performance at the same time. AutoHook is a perfect strategic fit for Urban Science due to its innovative approach to increase showroom traffic.”
Today, Element Financial Corp. will finalize its long-anticipated acquisition of GE Capital’s U.S.-based fleet management operations.
According to William Cieslak, Element Fleet Management’s vice president of vehicle remarketing, all portions of GE Capital Fleet Services in the United States will transition from the GE brand immediately.
Element had previously announced in June that it and GE Capital had entered into a definitive agreement for Element to acquire GE Capital’s fleet management operations in the U.S., Mexico, Australia and New Zealand for an all-cash purchase price of $8.6 billion Canadian, which at the time translated to roughly $6.9 billion in U.S. currency.
Element also recently announced that Kristi Webb has been appointed as the new president and chief executive officer of Element’s fleet management business, while Jim Halliday has been named as the executive vice president of Element Financial Corporation.
“The expanded scale of our combined fleet operations together with our industry-leading fleet management systems and expertise, position Element to accelerate the innovations that will transform the fleet management industry,” said Brad Nullmeyer, Element’s president. “Kristi, Jim and their colleagues understand the unique opportunity for growth and innovation that arises from combining these businesses to deliver best-in-class solutions to a wide range of fleet management customers.”
The acquisition of GE Capital’s fleet services operations in Mexico, Australia and New Zealand are expected to close by the end of the third quarter.
While unable to currently comment on how the acquisition will affect the structure of the GE Capital Fleet Services operations in the U.S., Cieslak did confirm that Paul Seger would maintain his current position as vice president of asset remarketing under the new Element Financial umbrella.
Asbury Automotive Group has sold a Porsche dealership in Missouri to Houston-based indiGO Auto Group, a 5-year-old company that has now bought two Porsche stores in the St. Louis area in less than four months.
The latest buy for indiGO is Plaza Porsche, located in Creve Coeur, Mo.
Prior to buying this Asbury store, indiGO purchased St. Louis’ Parktown Porsche on May 4, opening its doors as Porsche St. Louis Central on July 1.
The group has now consolidated those two stores — Porsche St. Louis Central and Plaza Porsche — into one rooftop: Porsche St. Louis. That dealership is the only factory-authorized Porsche franchised dealer in the St. Louis area, indiGO said.
The group’s stores are spread across three states (California, Texas and Missouri) and include 10 brands.
Lithia Motors is again saying “aloha” to potential customers in Hawaii by adding a fourth store within the state to the dealer group’s portfolio.
On Tuesday, Lithia announced it acquired Acura of Honolulu, a dealership the company indicated will add $50 million in estimated annual revenues.
Back in March, Acura of Honolulu moved into a new showroom and service facility on North Nimitz Highway.
“We are pleased to be growing in Hawaii,” Lithia president and chief executive officer Bryan DeBoer said. “This is our fourth store in the state and the only Acura store on Oahu, an island with a population of nearly a million people.
“This is our second Honda / Acura store in the market, and along with Island Honda of Maui will strengthen our presence in the market,” DeBoer added.
DealerSocket chief executive officer Jonathan Ord described it as “very humbling” to have a conversation with employees last week when the technology company announced its fourth major acquisition since the beginning of the year.
Ord made that statement since DealerSocket has gone from an idea sprouted in a garage with fellow founder Brad Perry to the point where the company is making acquisitions costing more than $50 million.
The latest move came last week through a definitive agreement under which DealerSocket will acquire Dealertrack’s Inventory+ business in an all-cash transaction for approximately $55 million.
Under the terms of the agreement, Dealertrack’s Inventory+ suite of inventory management solutions, including its AAX product in the U.S. and Canada, as well as its eCarlist websites, will be acquired by DealerSocket.
This development arrived after DealerSocket added DealerFire, FEX DMS and AutoStar Solutions to its dealer technology portfolio to enhance its marketing theme of, “We are automotive.”
Ord touched why DealerSocket added these Dealertrack assets when he addressed dealer clients hours after the acquisition announcement when the company hosted its User Summit in San Diego.
“One of the main criteria to acquiring companies is that we acquire teams and product lines that think the same way we do and can integrate well into our culture,” Ord said during his closing address posted online here.
“To our customers, to our employees, we are so ready for the future. We are so excited about the next step in changing the world,” he continued.
DealerSocket’s employee and customer count jumped via the latest acquisition, which is expected to be completed by the end of the third quarter. The company added 209 employees who worked with Dealertrack to run the inventory tool.
“We’ve been watching that business for a long period of time,” said Ord, adding that a current DealerSocket executive helped to develop the AAX product before it became a part of the Dealertrack portfolio several years ago.
“Dealertrack had the asset and did a bunch of good things with it. It’s a great value proposition for us and for our customers. We look forward to integrating that inventory management functionality,” he continued.
Ord said the deal brings 3,388 dealer customers into the DealerSocket family, as well.
“Some of that is overlap with our current customer base, but much of it is green field and white space where we can help all of those customers use better CRM, website and inventory technologies,” he said.
Ord spent the remainder of his time on stage at the DealerSocket event thanking dealer customers for attending in hopes each one received more skills and resources to improve their businesses.
“Go back to your stores and be a change agent,” Ord said.
In the latest development in the previously reported $4.2 billion cash deal, Cox Automotive and Dealertrack Technologies on Friday extended the offering period of its previously announced tender offer to purchase all of the outstanding shares of common stock of Dealertrack for $63.25 per share.
Officials said the offer, which was previously scheduled to expire at midnight ET on Friday has been extended until midnight ET on Sept. 14, unless it is extended further under the circumstances set forth in the merger agreement.
The companies added the expectation that the acquisition will close in the third quarter remains unchanged.
“All terms and conditions of the offer shall remain unchanged during the extended period,” officials said about the acquisition first announced on June 12.
American Stock Transfer & Trust Co., the depositary for the Offer, has advised Cox Automotive and Dealertrack that, as of 5 p.m. EST on Thursday, approximately 18,428,133 shares of Dealertrack had been validly tendered and not validly withdrawn pursuant to the offer. That figure is not including 34,360 shares tendered pursuant to notices of guaranteed delivery for which shares have not yet been delivered in settlement or satisfaction of such guarantee, representing approximately 32.79 percent of Dealertrack’s outstanding shares.
“Shareholders who have already tendered their shares of Dealertrack do not have to re-tender their shares or take any other action as a result of the extension of the expiration date of the offer,” officials said.
The acquisition is subject to a minimum tender of at least a majority of outstanding Dealertrack shares on a fully diluted basis, customary regulatory approvals and closing conditions.
This extension comes on the heels of Dealertrack agreeing to sell its inventory solution to DealerSocket in a $55 million cash deal.
In a move executives see as a pathway to satisfy regulators’ concerns, DealerSocket capped off its User Summit on the West Coast on Thursday by announcing a development with Dealertrack Technologies. The two technology companies entered into a definitive agreement under which DealerSocket will acquire Dealertrack’s Inventory+ business in an all-cash transaction for approximately $55 million.
Under the terms of the agreement, Dealertrack’s Inventory+ suite of inventory management solutions, including its AAX product in the U.S. and Canada, as well as its eCarlist websites, will be acquired by DealerSocket.
Officials indicated DealerSocket’s acquisition of Dealertrack’s Inventory+ business and Dealertrack’s acquisition by Cox Automotive are both expected to be completed by the end of the third quarter, subject to regulatory approval. They added Dealertrack’s Canadian Tradetracker product and Central Dispatch are not part of the transaction with DealerSocket.
The companies also said DealerSocket’s acquisition of Inventory+ is contingent upon approval by the Department of Justice in connection with the DOJ’s review of the pending acquisition of Dealertrack by Cox Automotive.
Dealertrack, DealerSocket and Cox Automotive are working cooperatively and expeditiously with the DOJ in connection with its review process, according to a statement released on Thursday.
“As we work to complete our transaction with Cox Automotive, DealerSocket’s acquisition of our Inventory+ business is a great result for our Inventory+ employees, customers, and our company as a whole,” said Mark O'Neil, chairman and chief executive officer of Dealertrack.
“Seamlessly transitioning our Inventory+ team members and customers to DealerSocket is our top priority,” O’Neil added.
DealerSocket recapped that Inventory+ can help dealers centralize and standardize the inventory management process, gain data-driven insights, and maximize profitability.
“We are pleased to be bolstering DealerSocket’s comprehensive website solutions, customer relationship management and training solutions with the highly complementary inventory management services available through Inventory+,” said Jonathan Ord, chief executive officer of DealerSocket.
“We look forward to welcoming the Inventory+ team to our organization and to working together to ensure a smooth transition for customers,” Ord went on to say.
Editor’s note: For more details about how this development is going to impact DealerSocket, watch for a future report published in both Auto Remarketing and BHPH Report.
AutoNation’s store count now is on track to surpass 250.
The dealer group today announced that it has signed agreements to acquire 13 stores in Georgia, Alabama and Tennessee from Carl Gregory Enterprises and a trio of stores in the Baltimore market from Valley Motors Auto Group, representing over $600 million in combined annual revenue.
Officials highlighted the franchises to be acquired in the Southeast include Chrysler, Dodge, Jeep, Ram, Fiat, Ford, Lincoln, Honda, Hyundai and Volkswagen. In 2014, the Carl Gregory stores retailed approximately 16,750 new and used vehicles.
The franchises to be acquired from Valley Motors Auto Group include Audi, Mercedes-Benz, Subaru and Volkswagen. The Valley Motors Auto Group stores retailed approximately 2,900 new and used vehicles in 2014.
Once these transactions are completed, AutoNation's total franchise count will be 327 franchises, an increase of 34 franchises.
The company acknowledged the transactions are subject to customary terms and conditions, including manufacturer approval, and are expected to close later this year.
“We are pleased to have the opportunity to add 13 stores in Georgia, Alabama and Tennessee and three stores in the Baltimore, Md., / Washington, D.C. market and bring AutoNation's store count to 253 from coast to coast,” said AutoNation chairman, chief executive officer and president Mike Jackson.
“We continue to seek acquisitions to leverage our scale, expand the AutoNation brand and provide a peerless experience to more customers,” Jackson continued.
AutoNation didn’t mention any specifics about this development when the company hosted a conference call to share its second-quarter financial performance. However, investment analysts did ask company leadership if the entry of Warren Buffett and Berkshire Hathaway into the dealership world impede AutoNation from making any significant moves like this one.
The Wall Street observer inquired since Buffett’s investment outfit purchased the Van Tuyl Group a little more than a year ago to form Berkshire Hathaway Automotive.
AutoNation executive vice president Jonathan Ferrando indicated, according to the call transcript posted by SeekingAlpha.com, that they “haven't run into them on acquisitions, and we see very good pipeline with a lot of activity out there. If anything it may have increased sellers that are interested in exploring the marketplace.”
Jackson added that he and Buffett have met “a few times.”
Jackson went on to say, “I’ve talked to him about the car business a few times. I admire him as an investor. He is a value investor so he’s certainly a credible buyer in the marketplace, absolutely. But is he going to rush in and overpay for stuff? I don't think so, and we see no sign of that yet."
Along with discussing two elements impacting the revenue stream at Insurance Auto Auctions as well as more auction locations that might become part of the company, KAR Auction Services chief executive officer Jim Hallett said the company is seeing volume growth both in the physical lanes as well as its online-only channels.
What especially impressed investment analysts was how ADESA reported a 14-percent volume in the second quarter as Wall Street observers noticed the industry-wide improvement came in at about 9 percent.
“I’d say that we look at those numbers with a little bit of caution. We were at 14 percent and the industry did report 9 percent,” Hallett said when KAR hosted a conference call to discuss its Q2 performance.
“But we really don't put a lot of credence in those numbers until we get a year-end result and we get a full report,” he continued. “But with that said, our commercial business is very strong. And all segments are doing well. And that’s right in our kitchen.”
Also cooking nicely in KAR’s wholesale kitchen is dealer consignment. Hallett described it as a “phenomenal job” that the company as a whole generated a 7-percent lift in dealer consignment in Q2.
“Many of you go back in history with me to where in 2009 our dealer consignment business was at 25 percent of our total business,” Hallett said. “And we knew with the headwinds that we were going to face on the commercial side that we had to get a lot better with dealer consignment.
“This is probably one of the initiatives that I’m most proud of is the fact that we’ve been able to take that dealer consignment up to 50 percent of our business and not just take it up, but to hold it there,” he continued.
Not only is KAR seeing a steady flow of dealer consignment volume, the company is also witnessing its lanes filling with units from other segments of the wholesale market, too, trends that Hallett is expecting to see continuing for the foreseeable future.
“Our customers have told us that off-lease supplies in the second half of 2015 will be stronger than what they were in the first half of the year,” Hallett said. “And the number of cars selling online only is growing, but not as fast as the supply of off-lease vehicles. The good news is this is driving strong physical auction volumes.
“We knew that volume was going to increase, but I think the pleasant surprise was all segments were really improving,” he continued. “When you think about, we often just focus on the fleet, lease and repo, obviously this is heavily driven by the fleet lease and repo segments. But you know what, we’ve seen a large increase in factory cars. We’ve seen an increase in daily rental cars.”
Expanding footprint
KAR is still on the hunt for more locations even though another site near Pittsburgh is already in its portfolio and a green field is coming together in the Chicago market.
“We’re still very much a believer in brick-and-mortar auctions,” Hallett said. “We believe that not only does it give you a physical site that allows you to also grow your ancillary services and your revenues, but it also gives you another customer base that grows the customer base, and contributes to the online customer buying base as well.”
Hallett then reiterated that KAR remains interested in acquiring more independent auctions and bring them into the company umbrella.
“We did identify there’s probably five to 10 of them, as you mentioned, in the country. I didn't say we're going to get all five or 10 of them done anytime soon,” Hallett said. “But we are always in communication with the independents. We have good relationships with the independents, and I think you'll see us complete Chicago, and I think you can expect that we would be opportunistic as more of these opportunities become available.
“You would see us act on specific ones if they contribute to the geography and the customer mix and the strategy that we're looking to build on overall,” he went on to say.
KAR chief financial officer executive vice president Eric Loughmiller then interjected that the company would “be disciplined on how we value the businesses as well.
“That’s part of what drags these things out is we're very disciplined on how we value the physical auction businesses,” Loughmiller added.
Factors influencing IAA’s revenue
Insurance Auto Auctions generated an 11-percent revenue increase during the second quarter. Perhaps the jump might have been higher, but Hallett indicated that “commodity prices have continued to be depressed, impacting the lowest value vehicles sold there, and therefore affecting our buy fees.”
Loughmiller explained how the company examined the situation further to prepare for its Q2 report. He examined selling prices for salvaged vehicles in the second quarter and compared them to a year earlier.
“I found it interesting that we sold more than two times the number of cars in Q2 2015 than Q2 2014 at a value of $300 or less,” Loughmiller said. “This clearly demonstrates the impact commodity prices are having on the value of salvaged vehicles, especially the lowest value vehicles.”
Beyond commodity prices, another investment analyst wondered if IAA is seeing insurers put additional pressure on the company to keep costs low as vehicle accidents rise, perhaps impacting KAR’s ability to generate more profit by this division.
“Really the pressure comes from service-level agreements that are embedded in these insurance contracts,” Loughmiller said. “The pressure I would describe as we're expected to pick up the cars faster. It helps to reduce the cost of storage and things that the insurance company might be incurring prior to it getting to the salvage yard. Again, the model works very well for us and I'd say the pressure is really focused on the tow cost.”
Lithia Motors announced Wednesday its acquisition of Bitterroot Ford.
The store, located in Missoula, Mont., will be renamed Lithia Ford of Missoula. Lithia expects the store to add $50 million in annual revenues to the group’s portfolio.
Bryan DeBoer, Lithia’s president and chief executive officer, noted the importance of the acquisition.
“This addition marks our first Ford store in the state and complements our existing Missoula CJD and Toyota locations,” DeBoer said. “We are pleased to expand in a market where we have an established presence and a solid track record of success.
“We welcome our newest team members and look forward to continuing to serve the community of Missoula for all their automotive needs.”
The acquisition brings Lithia’s 14-state influence up to 130 stores nationwide. Lithia management also discussed further expansion possibilities in its latest quarterly conference call.
For more information about the company, visit the Lithia website here.
