ATLANTA & LAKE SUCCESS, N.Y.- Cox Automotive, Inc., a leading provider of digital marketing, wholesale and e-commerce solutions across the automotive industry, and Dealertrack Technologies, Inc., a leader in software solutions and services for automotive retailers, today announced that they have entered into a definitive merger agreement, reports BusinessWire.
Cox Automotive will acquire Dealertrack in an all-cash transaction valued at $4 billion, or $63.25 per share. The acquisition is subject to a minimum tender of at least a majority of the outstanding Dealertrack common shares and customary closing conditions, and is expected to close in the third quarter of 2015. The Dealertrack Board of Directors has unanimously approved the acquisition and recommends that Dealertrack stockholders tender their shares in favor of the transaction.
The combination of Cox Automotive and Dealertrack will create a broader suite of open solutions that deliver greater value to consumers, dealers, lenders, manufacturers and the overall automotive industry. Dealertrack's broad solution set for dealers is an excellent complement to Cox Automotive's vehicle remarketing services and digital markets and software solutions that serve the wider automotive ecosystem. In addition, the combination will better serve customers across global markets through each company's respective international footprint. Together, Cox Automotive and Dealertrack will be well positioned to help customers grow their businesses and increase efficiencies as they navigate a rapidly changing global automotive industry.
"This is a great investment in our customers and in the auto industry," said Sandy Schwartz, President of Cox Automotive. "We have long admired the Dealertrack team and its highly respected brands. Integrating our platforms will be a big step forward in our shared vision of providing open, cost-effective and efficient solutions for dealers, lenders, manufacturers and consumers. We look forward to working with Mark O'Neil and his team as Mark continues to lead the acquired businesses and as we continue to innovate for our customers."
Mark O'Neil, Chairman and Chief Executive Officer of Dealertrack, said, "I am confident that with Cox Automotive, we will fully unlock the potential of our combined brands and teams in the service of our clients. Dealertrack team members have been a critical element in the tremendous success our company has achieved, and I want to thank all of our team members as we move forward into this exciting new chapter of growth. I am extremely enthusiastic about our future with Cox Automotive."
O'Neil added, "This provides a significant premium and immediate cash value for Dealertrack stockholders at closing. After careful and thoughtful analysis, with the assistance of our independent legal and financial advisors, we concluded that this transaction provides our stockholders with the opportunity to tender their shares at a price that recognizes the superior value of Dealertrack's industry partnerships, solutions, technology, financial management and international industry position."
The transaction is fully financed and is not subject to a financing condition. 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.
BDT & Company and Citigroup Global Markets are serving as financial advisors, and Wachtell, Lipton, Rosen & Katz is serving as legal counsel to Cox Automotive. Evercore is acting as financial advisor and O'Melveny & Myers LLP is serving as legal advisor to Dealertrack.
