Lake Success-based Dealertrack Technologies has agreed to be acquired by Atlanta’s Cox Automotive for $4 billion in cash, the companies announced Monday.
Dealertrack, which employs about 500 locally, has been planning a giant new headquarters in North Hills, but the firm is no longer sure it will remain on Long Island.
“The deal should close in the third quarter,” company spokesman Michael DeMeo told LIBN. “We’ll know more after that.”
Last year, the Nassau County IDA approved $1 million off the mortgage recording tax on the new headquarters, as well as a $5.7 million sales tax exemption and a 19-year break on property taxes after Dealertrack considered moving to Florida, New Jersey and Texas. New York State has also promised $12 million in support if the firm remains and meets certain hiring obligations.
Shares of Dealertrack, which provides financing software and online services to more than 20,000 auto dealerships, surged more than $22 following word of the deal, a 57 percent jump.
Cox Automotive, a part of sprawling Cox Enterprises, produces Kelley Blue Book and Auto Trader and offers a host of online services.
“This is a great investment in our customers and in the auto industry,” said Sandy Schwartz, president of Cox Automotive. “We have long admired theDealertrack team and its highly respected brands. Integrating our platforms will be a big step forward in our shared vision of providing open, cost-effective and efficient solutions for dealers, lenders, manufacturers and consumers. We look forward to working with Mark O’Neil and his team as Mark continues to lead the acquired businesses and as we continue to innovate for our customers.”
Mark O’Neil, Chairman and Chief Executive Officer of Dealertrack, said, “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. Dealertrack team members have been a critical element in the tremendous success our company has achieved, and I want to thank all of our team members as we move forward into this exciting new chapter of growth. I am extremely enthusiastic about our future with Cox Automotive.”
The transaction is fully financed and is not subject to a financing condition. The acquisition will be funded through an existing bank facility, a new $1.85 billion bank term loan arranged by Citigroup Global Markets Inc. and a $750 million common equity investment from BDT Capital Partners.