Dealertrack Buys Dealer.com for Nearly $1 Billion
Dealertrack Technologies Inc.’s latest acquisition ― of Dealer.com ― will be the company’s largest to date: nearly $1 billion in cash and stock.
Dealertrack has made quite a few purchases over the years, but the price tag on yesterday’s deal far outpaces the rest. Dealertrack will pay $620 in cash plus 8.7 million shares ― valued at about $372 million. By comparison, Dealertrack agreed to pay $53.4 million to buy Vintek in September, and $21.1 million to purchase Casey & Casey NPS Inc. in February.
Founded in 1998, Dealer.com grew to 830 employees across at its Burlington, Vt., headquarters and a Manhattan Beach, Calif., office. The company counts around 7,000 U.S. dealers as clients. Dealer.com expects to generate annual revenue in excess of $230 million for 2013, representing year-on-year growth in excess of 25%.
Dealertrack will retain the Dealer.com name in the marketplace to represent Dealertrack’s advanced and complementary set of digital marketing products and services, according to a Dealertrack company release.
Upon closing, Dealer.com CEO Rick Gibbst will become executive vice president and group president of Dealertrack’s digital marketing solution team.
Dealertrack expects to finance the cash portion through cash on hand and with debt financing from J.P. Morgan, BofA Merrill Lynch, Barclays, and Wells Fargo. The deal is expected to close by yearend 2014.
Evercore acted as financial advisor and O’Melveny & Myers LLP provided legal advice to Dealertrack. Goldman Sachs & Co. acted as financial advisor, and Wilson Sonsini Goodrich & Rosati PC provided legal advice to Dealer.com.
