Cox Automotive Inc. will pay $4 billion to add Dealertrack Technologies Inc. to its automotive family, which already includes Manheim, Kelley Blue Book and Autotrader, the companies announced today.
The all-cash transaction, valued at $63.25 per share, has been unanimously approved by Dealertrack board of directors, Cox said today in a written announcement. The company expects the deal to close in the third quarter.
“I am extremely enthusiastic about our future with Cox Automotive,” said Mark O’Neil, chairman and chief executive of Dealertrack. “This provides a significant premium and immediate cash value for Dealertrack stockholders at closing,” said O’Neil, who will continue to lead his team at Dealertrack.
Dealertrack, based in Lake Success, N.Y., is the industry’s largest online credit application network, where it connects 20,000 dealers with more than 1,500 lenders. Cox Automotive, a subsidiary of Atlanta-based Cox Enterprises, unites more than 20 brands that focus on providing software solutions to car shoppers. With $17 billion annual revenue, Cox Enterprises currently employs more than 50,000 people.
“This is a great investment in our customers and in the auto industry,” said Sandy Schwartz, president of Cox Automotive in a company press release. “We have long admired the Dealertrack team and its highly respected brands.”
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, Cox said.
