Cox Automotive To Buy Dealertrack Technologies In $4 Bln Deal

(RTTNews) - Cox Automotive Inc. has agreed to acquire Dealertrack Technologies, Inc. (TRAK) in an all-cash deal valued at $4 billion, the two companies said Monday. Dealertrack is a provider of software solutions for automotive retailers.

Atlanta-based Cox Automotive, a unit of closely-held conglomerate Cox Enterprises, provides vehicle remarketing services as well as digital marketing and software solutions for the overall automotive industry. The company's brands include auction company Manheim, Autotrader platform and Kelley Blue Book car valuation service, among others.

Under the terms of the deal, Cox Automotive will acquire Dealertrack for $63.25 per share. The offer price represents a 59 percent premium to Dealertrack's closing stock price of $39.85 per share on Friday.

Dealertrack's board of directors has unanimously approved the acquisition and recommended that its stockholders tender their shares in favor of the transaction. The acquisition is expected to close in the third quarter of 2015.

Cox Automotive said that the transaction is fully financed and is not subject to a financing condition.

The company will fund the acquisition through an existing bank facility, a new $1.85 billion bank term loan arranged by Citigroup Global Markets Inc., and a $750 million equity investment from BDT Capital Partners.

Cox Automotive noted that Dealertrack's solution set for dealers will complement its own vehicle remarketing services as well as digital markets and software solutions that serve the wider automotive ecosystem.

For Cox Automotive, BDT & Company and Citigroup Global Markets are serving as financial advisors, while Wachtell, Lipton, Rosen & Katz is serving as its legal counsel.

Evercore is acting as financial advisor to Dealertrack, while O'Melveny & Myers LLP is serving as legal advisor.

TRAK is trading at $62.79, up $22.94 or 57.57 percent on a volume of 7.62 million shares.