CHICAGO, Jan. 24,
2025 /PRNewswire/ -- Cars.com Inc. (NYSE: CARS)
(d/b/a "Cars Commerce" or the "Company"), an audience-driven
technology company empowering automotive, today announced the
acquisition of (DealerClub), a reputation-based automotive
digital wholesale auction. The Company paid approximately
$25 million in cash at closing. There
is the potential for an additional performance-based consideration
of up to $88 million based on
achievement of certain financial thresholds. The transaction closed
on January 23, 2025.
Transaction Highlights:
- Advances the Company's Trade & Appraisal strategy and
enables entrance into a large wholesale used car market worth over
$10B
- Adds a transactional revenue stream to the Company's powerful
subscription business
- Expected to create long-term cross-selling opportunities and
acceleration of AccuTrade adoption with an attractive full
lifecycle platform that seamlessly integrates retail and wholesale
operations
- Brings the transparency of reviews to the wholesale market for
the first time and builds on Company's legacy as the largest
provider of consumer and dealership reviews in auto
DealerClub is an emerging, dealer-to-dealer, digital wholesale
auction platform that facilitates transparent and efficient
transactions between automotive dealers. The company's auction
model is built around a reputation-based system – the first in the
industry – which promotes trust in transactions, ultimately
minimizing arbitration disputes and title issues. DealerClub's
commitment to innovation and dealer support aligns with broader
trends in the automotive industry towards digitization and
optimized inventory management. Serving more than 650 dealer
customers with a strong pipeline, the company generates revenue
primarily through transaction fees.
"The acquisition of DealerClub is a critical step for Cars
Commerce's strategic vision to expand into the wholesale market by
catering to the large dealer segment looking to gain operating and
financial efficiencies by leveraging technology to trade used
vehicles within a trusted network," said Alex Vetter, CEO of Cars Commerce. "By
integrating DealerClub's technology onto the Cars Commerce
platform, we add transactional dealer-to-dealer wholesale
capabilities focused on transparency and digital efficiency, and
significantly extend our influence in the wholesale market by
giving power and profits back to the retail community."
DealerClub launched to customers in 2024 by Joe Neiman, founder of ACV Auctions (ACVA), who
brings proven expertise in scaling similar platforms to
industry-leading positions. Cars Commerce expects the transaction
to have an immaterial contribution to revenue in 2025. In addition,
the transaction is not expected to be accretive to Adjusted EBITDA
in 2025, as the Company makes investments to scale DealerClub. More
information on the transaction will be provided on Cars Commerce's
Fourth Quarter/Full Year 2024 earnings call.
ABOUT CARS COMMERCE
Cars Commerce is an
audience-driven technology company empowering automotive that
simplifies everything about buying and selling cars. The Cars
Commerce platform includes the flagship automotive marketplace and
dealer reputation site Cars.com, innovative digital marketing
technology and services from Dealer Inspire, industry-leading
trade-in and appraisal technology from AccuTrade, an exclusive
in-market media network, and powerful and predictive AI
technologies that enable more efficient and profitable retail
operations. Cars Commerce is the essential partner to stay one step
ahead in automotive. Learn more at www.carscommerce.inc.
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" within
the meaning of the federal securities laws. All statements other
than statements of historical facts are forward-looking statements.
Forward-looking statements include information concerning goals,
plans, expectations, projections regarding the expected benefits of
the transaction, management's plans, projections and objectives for
the transaction, future operations, scale and performance,
integration plans and expected synergies therefrom, and our
financial position, results of operations, market position, capital
allocation strategy, initiatives, business strategy and
expectations of our management, and other matters and involve known
and unknown risks that are difficult to predict. As a result, our
actual financial results, performance, achievements, strategic
actions or prospects may differ materially from those expressed or
implied by these forward-looking statements. These statements often
include words such as "believe," "expect," "project," "anticipate,"
"outlook," "intend," "strategy," "plan," "estimate," "target,"
"seek," "will," "may," "would," "should," "could," "forecasts,"
"mission," "strive," "more," "goal" or similar expressions. All
forward-looking statements contained in this press release are
qualified by these cautionary statements. Forward-looking
statements are based on our current expectations, beliefs,
strategies, estimates, projections and assumptions, experience in
the industry as well as our perceptions of historical trends,
current conditions, expected future developments, global supply
chain shortages, fluctuating fuel prices, rising interest rates,
inflation and and other factors we think are appropriate. Such
forward-looking statements are based on estimates and assumptions
that, while considered reasonable by the Company and its management
based on their knowledge and understanding of the business and
industry, are inherently uncertain. While the Company and its
management make such statements in good faith and believe such
judgments are reasonable, you should understand that these
statements are not guarantees of future strategic action,
performance or results. Our actual results, performance,
achievements, strategic actions, or prospects could differ
materially from those expressed or implied by these forward-looking
statements. Given these uncertainties, you should not rely on
forward-looking statements in making investment decisions. When we
make comparisons of results between current and prior periods, we
do not intend to express any future trends, or indications of
future performance, unless expressed as such, and you should view
such comparisons as historical data. Whether or not any such
forward-looking statement is in fact achieved will depend on future
events, some of which are beyond our control.
Forward-looking statements are subject to a number of risks,
uncertainties and other important factors, many of which are beyond
our control, that could cause our actual results and strategic
actions to differ materially from those expressed in the
forward-looking statements contained in this press release. For a
detailed discussion of many of these and other risks and
uncertainties, see "Part I, Item 1A., Risk Factors" and "Part II,
Item 7., Management's Discussion and Analysis of Financial
Condition and Results of Operations" in our Annual Report on Form
10-K for the year ended December 31, 2023, as filed with the
Securities and Exchange Commission ("SEC") on February 22,
2024 and our other filings filed with the SEC and available on
our website at investor.cars.com or via EDGAR at www.sec.gov.
You should evaluate all forward-looking statements made in this
press release in the context of these risks and uncertainties. The
forward-looking statements contained in this press release are
based only on information currently available to us and speak only
as of the date of this press release. We undertake no obligation,
other than as may be required by law, to update or revise any
forward-looking or cautionary statements to reflect changes in
assumptions, the occurrence of events, unanticipated or otherwise,
or changes in future operating results over time or otherwise. The
forward-looking statements in this press release are intended to be
subject to the safe harbor protection provided by the federal
securities laws.
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SOURCE Cars Commerce