ATLANTA AND LAKE SUECCESS, N.Y. — A day after the U.S. Department of Justice filed a lawsuit to block Cox Automotive’s acquisition of Dealertrack until the software maker divested its inventory management solution business, Dealertrack announced it has completed the sale of its Inventory+ business to DealerSocket Inc. in an all-cash transactions for approximately $55 million.
The announcement preceded Cox Automotive’s announcement that it has completed its acquisition of Dealertrack Technology in an all-cash deal worth $4 billion. Dealertrack now becomes a private subsidiary under the Cox Automotive division. It will now cease trading and will no longer be listed on the NASDAQ Global Market.
“The team members from Dealertrack have built an outstanding company and I am excited to welcome them to the Cox family,” said Cox Automotive President Sandy Schwartz. “The combination will truly open the doors for our clients, team members and the industry as we drive even greater innovation and provide even better solutions to our clients.”
The completed deal ends a more than four-month process to bring the two companies together. Cox, which is expected to generate $5 billion in revenue this year, brings to the table digital marketing, wholesale and ecommerce solutions marketed through more than 20 brands, including household names like Manheim, Autotrader, Kelley Blue Book, vAuto, VinSolutions and XTime, while Dealertrack is an established leader in lending, digital marketing and retail software solutions. Combined, the two companies now have solutions that touch every part of the dealership.
“This combination brings together some of the best people in the industry with strong common values,” said Dedalertrack Chairman and CEO Mark O’Neil, who will take on a senior executive role at Cox Automotive. “I want to extend my appreciation to all of our Dealertrack team members for the foundation they have built, and thank my new Cox Automotive colleagues for the warm welcome as we join our new family. Working together, we will fully unlock the potential of our combined brands and teams to serve our clients.”
On Tuesday, the Department of Justice challenged the acquisition on grounds that Cox would dominate the inventory management solution market, and filed a civil lawsuit to block the transaction. In order for the acquisition to move forward, the regulator required that Cox divest Dealertrack’s inventory management solution business.
Today, Dealertrack announced that it had completed the sale of its Inventory+ business, including the AAX product in the United States and Canada, to DealerSocket. Approximately 200 former Dealertrack employees will now transition to DealerSocket.
“Our goal is a seamless transition, and over the coming months, our integration teams will work to capture the best of both organizations,” Cox Automotive Schwartz said of the completed transaction. “Starting today, we are moving forward as one organization that is passionately pro-industry, committed to open choice and dedicated to strong partnerships.”
Originally posted on F&I and Showroom