Lake Success, N.Y. and Burlington, Vt. — Dealertrack Technologies and Dealer.com announced a definitive agreement for Dealertrack to acquire Dealer.com, a provider of marketing and operations software and services for the automotive industry.
Under the terms of the agreement, Dealertrack will acquire all the equity of Dealer.com for approximately 8.7 million shares of Dealertrack’s common stock, and $620 million in cash, subject to customary post-closing adjustments. Dealertrack expects to finance the cash portion of the purchase price through cash on hand and with fully committed debt financing. The deal is expected to close in the first quarter of 2014, subject to regulatory approval, and the transaction is expected to be accretive to Dealertrack’s standalone multi-year organic growth profile to Dealertrack’s diluted adjusted net income per share.
Established in 1998, Dealer.com is a pioneer in bringing automotive dealerships online. The company has grown to 830 employees across its Burlington, Vt. headquarters and Manhattan Beach, Calif. office, and serves approximately 7,000 U.S. dealers with its integrated suite of products. Dealer.com expects to generate annual revenue in excess of $230 million for 2013, representing year-over-year growth in excess of 25% relative to 2012.
Dealertrack places a high value on the culture of creativity and innovation that has been the hallmark of Dealer.com, and plans to establish Dealer.com’s headquarters as a center of excellence for digital marketing solutions, along with Dealertrack’s Dallas, Texas, office. Dealertrack will retain the Dealer.com name in the marketplace to represent Dealertrack’s digital marketing products and services.
“By joining forces with Dealer.com, we will be able to provide dealers, OEMs and other industry partners with a deep and broad array of integrated solutions,” said Mark O’Neil, chairman and CEO, Dealertrack. “Dealer.com and its team, whom we’ve long admired and respected, complement our solutions, catapulting our vision of delivering the market leading suite of integrated technologies capable of transforming automotive retailing even further.”
Dealer.com CEO Rick Gibbs added, “This is a very exciting opportunity for Dealer.com. By combining our strengths with Dealertrack, we will be able to enhance our marketplace offering with an integrated, end-to-end solution that will help bring the automotive retailing industry to a new level of efficiency and performance.
“Dealer.com is proud of the unique culture we, as a company, have nurtured over the years, making this a truly outstanding place to work. We will look to carry this same culture — along with our energy and spirit of innovation — forward as we unite with Dealertrack.”
Upon closing, Gibbs will become executive vice president and group president of Dealertrack’s digital marketing solution team.
