You will often hear actors talk about roles they were born to play. Where the character and the setting are so closely aligned with the actor’s own backstory that the role is but an extension of themselves.
The purchase of ALG by TrueCar Inc. appears at first glance to be the same sort of perfect marriage. TrueCar, an internet startup that aims to offer consumers accurate and up-to-date vehicle value information, now owns a company that provides financial institutions with remarketing values for off-lease vehicles. This is not to say that ALG was in the wrong place under its previous owner, DealerTrack, but that TrueCar’s mission statement and value proposition more closely resemble that of ALG. And DealerTrack seems to be making out well in the deal, acquiring an equity stake in TrueCar with the opportunity to purchase more of the company in the future. According to one blog, the price tag for the deal was $83 million.
ALG will be run separate and independent of TrueCar, according to a press release that announced the acquisition, but it seems there are several opportunities to leverage each other’s data. Could having access to ALG’s formulas help TrueCar more accurately price vehicles on the front end of the transaction? Could ALG benefit by having more data about how much consumers are paying for new cars? The answer to both questions seems to be yes.
In the press release announcing the acquisition, TrueCar executives twice mentioned their hopes for expanded relationships with manufacturers. Reading between the lines, that may be the first place TrueCar looks to leverage its new acquisition, regardless of whether ALG is run independently or not.
TrueCar appears to have been earned the right to play its perfect role. The job is now proving that the partnership was not miscast.
