Dec. 20 (Bloomberg) -- Dealertrack Technologies Inc., which makes software used by car dealerships, is acquiring Dealer.com for about $1 billion.
Dealertrack will pay $620 million in cash and about 8.72 million shares of stock -- valued at $373 million at yesterday’s closing price of $42.80 -- for Dealer.com, which offers digital marketing services to the auto industry, according to a statement yesterday.
The purchase is the largest for Lake Success, New York-based Dealertrack, whose software connects car dealers with lenders and credit-rating companies, according to data compiled by Bloomberg. The company has spent about $461 million on 19 takeovers excluding Dealer.com, the data show.
Dealer.com’s online capabilities complement the in-store accounting, payroll, and financing services Dealertrack provides, Mark O’Neil, Dealertrack’s chief executive officer, said in an interview yesterday.
“We think we can transform auto retailing,” O’Neil said. “We are going to be able to connect the online process to the in-store process.”
Dealertrack rose 13 percent to $48.19 as of 4 p.m. in New York today, giving it a market value of $2.1 billion. The company has about 44 million shares outstanding, data compiled by Bloomberg show.
Dealer.com, founded in 1998, is owned by private-equity firms including Apax Partners LLP and Accel Partners. The Burlington, Vermont-based company provides online marketing and sale services to 7,000 car dealers in the U.S. It also operates about 13,000 car franchise websites.
Dealer.com had a compounded annual growth rate of 36 percent since 2011, according to an investor presentation. The transaction values Dealer.com at about 20 times its earnings before interest, taxes, amortization and depreciation for the 12 months ended Sept. 30, the presentation shows.
Evercore Partners Inc. advised Dealertrack on the deal, while Goldman Sachs Group Inc. advised Dealer.com, according to yesterday’s press release.
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