During the past few years, it was Dealertrack Technologies announcing not only year-over-year growth but also acquisitions that pushed the company toward plans to move next year into a larger new headquarters consisting of more than 200,000 square feet.
Then on Monday, the perspective completely flipped for Dealertrack as word came to light about Cox Automotive making plans to acquire the service provider that helps stores manage their vehicle inventory as well as business in the finance office for $4 billion in cash.
When reached exclusively by Auto Remarketing on Monday, Dealertrack co-president Raj Sundaram said, “28 acquisitions later, this one is a little different.”
Among those moves, Dealertrack brought firms such as Dealer.com, Auto Title Express and 1st Auto Transport Directory into its portfolio. When Cox Automotive’s deal is finalized as projected during the third quarter, Dealertrack will join Manheim, Autotrader, Kelley Blue Book, vAuto, NextGear Capital and HomeNet Automotive within the same group.
“I think it’s exciting right now mainly because our vision is extremely aligned,” Sundaram said. “That’s the part that is motivating all of us. It’s a great company.
“You can use all kinds of words to describe it, but it does feel a little unique to put it mildly to be the acquiree, if I could use that word,” he continued. “But it’s exciting to talk about this with our clients. Strategically, it’s fantastic. There are a lot of complementary businesses and solutions, which really help us to set things up.”
Like Cox leadership, Sundaram described how Dealertrack approaches the design and implementation of products and services not only for dealerships but finance companies as well.
“One of the core values we have is being open, a so-called open system standpoint, whether the DMS or anything else,” Sundaram said. “Our relationship with (Cox Automotive) has been very similar to our relationship with several other industry players who want to engage with us.
“It’s been very good in both directions,” he added.
Sundaram also took the opportunity with Auto Remarketing to emphasize Dealertrack’s commitment to its client base. According to the company’s first-quarter financial report, 20,661 dealers use the company’s technology, as do another 1,557 finance companies.
“The message is this is an exciting opportunity from the standpoint of the benefits of this transaction are going to offer dealers and how we’re going to help dealers execute on their vision. The combined capability we’re going to bring is going to be tremendous for dealers to continue to thrive,” Sundaram said.
“You can expect us to be as committed if not more from a standpoint of helping dealers execute and thrive,” he continued.
“(Finance companies) play a critical role in Dealtrack’s success,” Sundaram went on to say. “We look forward to being an even stronger business partner with lenders. Together the broad suite of open solutions will deliver great value to lenders and their customers, which in many cases happen to be the dealers.”
Cox Automotive added to its industry portfolio this morning, announcing that it will acquire Dealertrack Technologies in an all-cash transaction valued at $4 billion, or $63.25 per share.
Officials indicated the acquisition is subject to a minimum tender of at least a majority of the outstanding Dealertrack common shares and customary closing conditions, and is expected to close in the third quarter of this year. They added the Dealertrack board of directors has unanimously approved the acquisition and recommends that Dealertrack stockholders tender their shares in favor of the transaction.
The companies went on to highlight the combination of Cox Automotive and Dealertrack will create a broader suite of open solutions that deliver greater value to consumers, dealers, lenders, manufacturers and the overall automotive industry.
Cox Automotive president Sandy Schwartz pointed out Dealertrack’s broad solution set for dealers is an excellent complement to Cox Automotive’s vehicle remarketing services and digital markets and software solutions that serve the wider automotive ecosystem. In addition, the combination will better serve customers across global markets through each company's respective international footprint.
Together, Schwartz insisted Cox Automotive and Dealertrack will be well positioned to help customers grow their businesses and increase efficiencies as they navigate a rapidly changing global automotive industry.
“This is a great investment in our customers and in the auto industry,” Schwartz said.
“We have long admired the Dealertrack team and its highly respected brands,” he continued. “Integrating our platforms will be a big step forward in our shared vision of providing open, cost-effective and efficient solutions for dealers, lenders, manufacturers and consumers.
“We look forward to working with Mark O'Neil and his team as Mark continues to lead the acquired businesses and as we continue to innovate for our customers,” Schwartz went on to say.
Mark O’Neil is chairman and chief executive officer of Dealertrack.
“I am confident that with Cox Automotive, we will fully unlock the potential of our combined brands and teams in the service of our clients,” O’Neil said. “Dealertrack team members have been a critical element in the tremendous success our company has achieved, and I want to thank all of our team members as we move forward into this exciting new chapter of growth. I am extremely enthusiastic about our future with Cox Automotive.”
O'Neil went on to say, “This provides a significant premium and immediate cash value for Dealertrack stockholders at closing. After careful and thoughtful analysis, with the assistance of our independent legal and financial advisors, we concluded that this transaction provides our stockholders with the opportunity to tender their shares at a price that recognizes the superior value of Dealertrack's industry partnerships, solutions, technology, financial management and international industry position.”
The companies noted the transaction is fully financed and is not subject to a financing condition. The acquisition will be funded through an existing bank facility, a new $1.85 billion bank term loan arranged by Citigroup Global Markets Inc. and a $750 million common equity investment from BDT Capital Partners.
BDT & Company and Citigroup Global Markets are serving as financial advisors, and Wachtell, Lipton, Rosen & Katz is serving as legal counsel to Cox Automotive. Evercore is acting as financial advisor and O'Melveny & Myers LLP is serving as legal advisor to Dealertrack.
Advantage Rent A Car announced today it has completed its acquisition of E-Z Rent-A-Car.
Now joined, the company features a combined network of 85 locations with a presence at 22 of the top-25 airports in the United States.
“We can now see even more benefits to our ‘one company, two brand’ approach than originally envisioned,” said Bill Plamondon, Advantage’s president. “The combination will allow greater efficiencies and economies of scale in areas such as fleet, maintenance, back office processing and procurement.”
The combined company will be led by experienced managers, including the founders of E-Z Rent-A-Car, Mehrdad Memarpouri and Hesam Sahraian, as well as Advantage’s William Plamondon and Scott Lieberman, alongside Gabriel de Alba, the managing director and partner of The Catalyst Capital Group.
“This combination is exactly what we strive for in an investment,” de Alba said. “Delivery of a solution to the regulators, high barriers to entry, valuable underlying assets, proven established brands, a seasoned management team and the economies of scale of a major player that is positioned to grow its market share.”
ADESA announced on Wednesday its plans to rename two of its auctions in the Pittsburgh area.
With its recent acquisition of Pittsburgh Auto Auction, ADESA now has three auctions in the area, also including ADESA Pittsburgh in Mercer, Pa., and ADESA PA in York, Pa.
Because the newly acquired Pittsburgh AA is located closer to the city limits of Pittsburgh, it will take on the ADESA Pittsburgh name in July, while the location in Mercer will be renamed ADESA Mercer this month.
The newly acquired Pittsburgh AA features a 200-acre facility on the southeast side of the city and has been in operation for 35 years.
It currently has seven fully automated auction lanes and full-service reconditioning facilities with a body shop and mechanical shop.
“We’re excited about fully integrating Pittsburgh Auto Auction into our ADESA operations,” said Stéphane St-Hilaire, the company’s president and chief executive officer. “We hope that renaming these auction locations will make it simpler for our customers and others doing business with us.”
KAR Auction Services announced Monday it has purchased Autoniq and MobileTrac, which is doing business as instaVIN.
The purchase expands the company’s Digital Services Group, KAR said in a news release.
“Dealers in-lane and online require real-time access to relevant vehicle information to make split-second decisions when buying and selling inventory,” said KAR Digital Services Group president Peter Kelly. “As online and mobile technologies are becoming increasingly important, tools like Autoniq and instaVIN improve outcomes for our sellers and buyers and make it easier for them to conduct business.”
Among the data points that Autoniq provides to dealers in real-time are vehicle pricing, history reports and market guides. Through its mobile app, dealers can scan VINs through their smartphones, while also checking out auction run lists, vehicle history reports and market value reports.
Additionally, there are comprehensive wholesale and retail reports for all U.S. markets.
As for MobileTrac, it provides instaVIN’s vehicle history reports — as well as the instaLEAD and instaDEAL technology that allows dealers to attract and structure retail transactions with online shoppers — to retail and wholesale buyers.
“We will continue to invest in technology that adds value for our buyers and sellers,” said Kelly. “As technology leaders, we are always seeking new ways to enhance the KAR portfolio service offering to our customers, and we are excited to welcome Autoniq and MobileTrac to KAR.”
J.D. Power has reached an agreement with the National Automobile Dealers Association to acquire NADA Used Car Guide, the company announced Thursday morning.
The deal will likely close in the third quarter and is subject to Hart-Scott-Rodino Act Review.
J.D. Power will continue to use the NADA Used Car Guide name for a certain period before transitioning it to the J.D. Power brand. NADA Used Car Guide will remain based in the McLean, Va., area.
“We are thrilled to add the NADA Used Car Guide and its vehicle valuation capabilities to J.D. Power,” said Finbarr O’Neill, president of J.D. Power. “NADA Used Car Guide analytical solutions will perfectly complement PIN’s expertise in new- and used- vehicle retail and pricing services, and we will gain an impressive array of integrated vehicle valuation solutions.
“The Guide’s high integrity and unbiased approach to used-vehicle values, analytics and insights fits perfectly with J.D. Power’s reputation as a trusted advisor to the automotive industry.”
J.D. Power said in its news release that with the deal, the PIN retail sales and pricing analytics will be complemented by NADA Used Car Guide’s knowledge, expertise and market presence. This gives the company the opportunity to broaden its analytical and modeling capabilities into new product, expand its auto finance and auto insurance presence and boost its retail solutions, the company said.
“J.D. Power has built its strong brand through analytics, data and its growing benchmark business. Benchmarks are a key to the McGraw Hill Financial business model and the NADA Used Car Guide adds a unique set of valuations, which are used as benchmarks by customers, to the well-respected J.D. Power portfolio,” said Douglas Peterson, president and chief executive officer of McGraw Hill Financial.
“We see clear opportunities for both revenue and cost synergies as J.D. Power couples NADA Used Car Guide with the real-time automotive capabilities of the Power Information Network (PIN) to bring value to a broad set of customers. This is another example of McGraw Hill Financial utilizing an attractive tuck-in acquisition to expand the capabilities of the company's iconic businesses,” Peterson added.
NADA members will still be provided with a subscription to the Guide as part of their membership, NADA president Peter Welch said in the news release.
“This deal is a perfect fit for dealers and NADA Used Car Guide customers. Under terms of the deal, NADA members will continue to receive a subscription to the Guide as a membership benefit,” said Welch. “NADA and J.D. Power will continue to build upon our longstanding alliance by sharing data and insights, and bringing together retailers and leaders from the automakers, suppliers and the media at co-hosted conferences and events, offering thought leadership and solutions directly benefiting the retailer network and overall automotive industry.”
NADA Used Car Guide vice president and chief operating officer Mike Stanton added: “This is an exciting opportunity for Used Car Guide to take advantage of great synergies with JD Power. On its own, the NADA Used Car Guide provided the best data available on used-car pricing. But now, our customers will benefit from a seamless view of new- and used-vehicle price information with both companies under the umbrella of the J.D. Power brand.”
In announcing its purchase of Dealix and Autotegrity last week, Autobytel said it plans to grow the used-car side of its business.
So, Auto Remarketing reached out to Autobytel’s president and chief executive officer, Jeff Coats, to find out more about why the company saw a need to expand its presence in the pre-owned space.
“The used-car market is very large and growing more quickly than new — and right now, used cars represent only 9 percent of our current revenue, so there is plenty of upside opportunity for us” Coats said. “According to IHS data (formerly Polk) many consumers are in the market for both new and used, so not focusing on used is definitely a missed opportunity.”
According to Coats, Dealix’ revenue from pre-owned leads accounts for over 16 percent of its overall revenue, nearly double the percentage of Autobytel’s former numbers. The acquisition of Dealix also includes its site, UsedCars.com.
“With UsedCars.com, we now have the ability to enhance our used-car lead program, and we are also excited about the relaunch of Car.com,” Coats said.
Coats touched on this topic further during a conference call on Thursday when the company formerly announced the acquisition, briefly outlining a bit of Autobytel’s strategy in the space.
“They do generate a pretty good volume of their leads off of their UsedCars.com site, but I think that site probably has not been as strongly invested in over the last couple of years as we would probably now, because we view that as an integral part of our strategy going forward,” Coats said. “We will definitely be beefing that up and continuing to focus on that as we are really beginning to grow our used-car pay-per-lead business.”
Auto Remarketing also followed up with Coats on the used-car beta test platform the company had previously mentioned alongside its acquisition news to see if any details could be fleshed out.
“Our latest used-car test involved utilizing our existing SEM strategies, which had been very successful for us on the new car side, to drive in-market pre-owned car buyers to dealers,” Coats said. “We really hadn’t focused on that until now.”
ADESA announced that its subsidiary, AutoVIN, has closed its acquisition of DataScan Field Services, a vehicle inspection business.
“The closing of this acquisition allows us to move forward with new and improved services for our customers,” said Stephane St-Hilaire, ADESA’s president and chief executive officer. “Combining the best of what both companies have to offer is a win for everyone. We welcome 500 new employees to the KAR group of companies, and are excited to provide an improved product for our customers.”
DataScan leverages Internet-based technology for its vehicle inspection services for auto manufacturers, financial institutions, leasing companies and warranty companies.
Brasher’s Rallies Support for Family Member
The Brasher’s Northwest Auto Auction as well as Brasher’s Portland recently hosted its Brasher’s Golf Challenge, which it has held annually since 2007 to help defray the medical costs of Natasha Melton, the youngest daughter of Mark Melton, the general manager of Brasher’s Northwest, the former of which works to overcome the effects of spina bifida.
Now 15 years old and in high school, Natasha has undergone 26 surgeries so far but remains as active and positive in life as possible. The annual golf challenge, which was this year hosted at the Langdon Farms Golf Club in Aurora, Oregon, has raised over $170,000 since the first benefit to help manage the medical costs associated with her treatments. This year’s tournament raised a total of $27,680.
“Because of your generosity over all these years you have helped my family in such a huge way,” she said, following the tournament. “I am so grateful for the generous gift I have received every year as a result of the Brasher’s Golf Challenge. It has opened a world of wonder for me.”
All proceeds from the tournament go toward the funding of Natasha’s medical costs and equipment. In the past, the proceeds have helped pay for tutoring, wheelchairs, crutches and more.
Autobytel has acquired Dealix Corp. and Autotegrity, Inc. in a $25 million cash deal.
The deal to acquire those two wholly owned subsidiaries of CDK Global, LLC includes a working capital adjustment, Autobytel said in a news release.
Dealix is a provider of leads to dealers and OEMs, and also operates UsedCars.com. That site joins other consumer-facing portals in the Autobytel family, including Autobytel.com and Car.com (which is set to be re-launched soon).
Beyond UsedCars.com, the deal also brings these products to Autobytel’s platform: TextShield, SaleMove, AutoWeb and GoMoto.
With the purchase, Autobytel adds about 600 franchised dealers and 300 independent dealers to its network, which will now grow to a sum of nearly 5,000 stores. (Not included in the additions are the 450 overlapping franchised and 170 overlapping independent dealers using lead services from both Dealix and Autobytel.)
The acquisition is likely to be accretive to net income this year, management anticipates.
"This acquisition creates an even more dynamic and effective automotive marketing organization," said Jeff Coats, president and chief executive officer of Autobytel. "The addition of Dealix further expands our reach and influence in the automotive industry by increasing our lead generation capabilities and the size of our car dealer network, and also strengthens our relationships with auto manufacturers.
"Autobytel's existing proprietary lead strategies and customer acquisition programs produce estimated buy rates of at least three times the industry average. As such, by combining these organizations, we expect to significantly improve the quality of leads and related services that members of the Dealix network are accustomed to receiving," he added.
"Developing a greater used-car presence has been a key growth initiative for Autobytel," continued Coats, "with the company's commercial acquisition team launching a used-car beta test platform earlier this year. Our internally-generated used car business has been ramping steadily as we collect the information that allows us to optimize for quality, volume and margin. However, UsedCars.com makes an immediate contribution to this initiative and will accelerate its development."
Asbury Automotive Group is expanding in the Atlanta market. The dealer group announced that it has purchased Capital City Nissan, which rakes in approximately $70 million in revenues each year.
Asbury will rebrand the dealerships Nalley Nissan Atlanta, bringing its store count to 17 in the state.
The new store is located near I-285 at 5211 Peachtree Industrial Blvd. in Chamblee, Ga.
"We are very excited to add another Nissan store to better serve our Atlanta customers and are pleased to expand our suite of Nalley stores. We welcome our new employees to the Asbury family and are looking forward to our opportunities in the Perimeter area," said David Hult, executive vice president and chief operating officer of Asbury Automotive Group.
The dealer group also purchased a Ford store in Georgia just this past December.
And that same month, Asbury also purchased its seventh store in Texas.
