Reynolds and Reynolds Co., Cox Automotive and CDK Global are seeking or contemplating new acquisition deals in 2023 to help modernize their offerings, reported an article in Automotive News.
According to the report, leaders at the three largest retail technology companies have confirmed intentions to acquire other companies or products or at least be open to opportunities should they arise.
None of the companies mentioned specifics, but it’s likely they will target dealer management software technology that includes legal compliance, consumer data platforms, robotic process automation and new-vehicle inventory tools, according to Steve Greenfield, CEO of venture capital firm Automotive Ventures.
Greenfield noted technology startups face a challenging fundraising environment, which could increase pressure to sell to buyers with major dealership management systems.
He suggests even DMS provider Tekion will watch for technology that could be an asset.
"While we will not be actively going out and looking for acquisitions, we will keep our eyes open and looking at acquiring products and/or companies to enhance value for our customers and help accelerate our growth," Tekion CEO Jay Vijayan said in an email statement to Automotive News.
Reynolds announced on Jan. 26, during the NADA Show in Dallas, that it had acquired American Guardian Warranty Services. Reynolds President Chris Walsh has noted that the company will be "acquisition focused" in 2023, after purchasing two companies in 2022.
The acquisition targets, he said, will be companies that offer products to help dealerships enhance the customer experience.
Cox Automotive made two acquisitions in 2022 and will likely do so in 2023, according to President Steve Rowley. He said the company is always looking for opportunities to enhance products and gaps.
CDK CEO Brian MacDonald also told Automotive News the company will consider acquisitions in 2023. He did not share specifics or speculate on the companies or technology CDK seeks.