Cox Automotive just got bigger.
Cox, which already owns, among others, auction company Manheim, valuation company Kelley Blue Book and used inventory finance company NextGear Capital, bought Dealertrack Technologies earlier this week in a reported US$4 billion cash deal.
The deal is expected to close some time in the third quarter.
Cox president Sandy Schwartz said the combo would create a “broader suite of solutions that deliver greater value to consumers, dealers, lenders, manufacturers and the overall automotive industry.
“Integrating our platforms will be a big step forward. The portfolios have little overlap. It gives us end-to-end solutions. As the world changes to digital retailing, Dealertrack gives us more pieces to help auto dealers.”
One of the pieces Schwartz is talking about is online marketer Dealer.com, which Dealertrack bought for $1.25 billion in March 2014.
Dealer.com supplies a variety of services to car dealerships, including online digital marketing, advertising and website design.
Industry analysts see Cox moving to the new-car sales side.
Sanjay Varma, managing director of Teneo Capital, told Bloomberg.com
“They’re already the biggest in the business on the used-car and now they’re trying to broaden it to the new-car side.”
Cox announced the sale June 15.
Dealertrack CEO Mark O’Neil says “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.”
The purchase will need the approval of a majority of Dealertrack’s shareholders. Dealertrack says its board of directors has unanimously approved the purchase. The deal is expected to close in the third quarter of this year.
Cox says that once the deal closes, Dealertrack will become a private subsidiary in the Cox Automotive Division.