CAMBRIDGE, Mass., Dec. 10, 2020 (GLOBE NEWSWIRE) -- CarGurus (Nasdaq: CARG), a leading global online automotive marketplace, today announced it has entered into a definitive agreement to acquire a 51% interest in Plano, TX-based CarOffer at an enterprise valuation of $275M, with the ability to buy the remaining equity interest in the company over the next three years. The deal is subject to certain regulatory approvals and other closing conditions.
CarOffer is an automated instant vehicle trade platform that is disrupting the traditional wholesale auction model with technology that enables dealers to bid, transact, inspect and transport seamlessly. The acquisition will add wholesale capabilities to CarGurus’ portfolio of dealer offerings, creating a complete and efficient digital solution for dealers to sell and acquire vehicles at both retail and wholesale. The expansion to wholesale is a key component of CarGurus’ overall platform strategy, which also includes acceleration of a robust digital retail offering for dealers and consumers.
“CarOffer is disrupting the traditional wholesale auction model in the same way that CarGurus gained our position as the leading online consumer automotive marketplace in the U.S.1, by leveraging technology, data and analytics to build more transparent solutions,” said Jason Trevisan, Chief Financial Officer at CarGurus. “The combination of CarGurus’ industry-leading dealer network and our Instant Market Value retail pricing, and CarOffer’s instant trade technology and logistics capabilities, creates a powerful selling platform. We believe we will be the most valuable partner to help dealers sell more cars at retail and now also sell and acquire cars in the wholesale channel.”
CarGurus is the largest automotive marketplace in the United States, with more visitors1 and more inventory than any other major online automotive marketplace2. The company works with more than 30,000 dealers globally who subscribe to CarGurus’ listings and marketing services.
CarOffer was founded by auto industry veteran, Bruce Thompson, who brought the platform to market in August 2019. Unlike traditional vehicle auctions which require manual bidding and vehicle evaluation, CarOffer enables buying dealers to create standing buy orders and provides instant offers to selling dealers. The company’s proprietary Buying Matrix™ technology automatically matches the buy orders to vehicle inventory, allowing sellers to simply accept an offer and check out. Since its 2019 launch, CarOffer has experienced substantial growth, with more than 2,0003 dealership rooftops installed. The company processed over $350M4 in merchandise and service transactions in the third quarter of 2020.
“I’ve long admired the team at CarGurus for the innovation they have driven in the automotive retail sector, and the large consumer audience and dealer base they have built,” said Bruce Thompson, founder and CEO of CarOffer. “CarOffer gives dealers an entirely new way to win more trades, acquire more used inventory and ultimately sell more cars. We’ve seen rapid adoption of the platform since our launch, and with CarGurus’ investment and dealer reach, we can accelerate that pace and volume to reach even more dealers. The synergies we will create with CarGurus’ market data and pricing engine will enable us to provide tools and sourcing capabilities dealers desperately need.”
Upon closing, CarOffer will continue to operate independently under its current leadership and will retain its distinct brand and office location in Plano, Texas. Portico Capital is serving as the exclusive financial advisor to CarOffer in the transaction.
The transaction is expected to close in January 2021 pending the requisite regulatory approvals and satisfaction of other closing conditions.
About CarGurus:
Founded in 2006, CarGurus (Nasdaq: CARG) is a global online automotive marketplace connecting buyers and sellers of new and used cars. The company uses proprietary technology, search algorithms and data analytics to bring trust and transparency to the automotive search experience and help users find great deals from top-rated dealers. CarGurus is the most visited automotive shopping site in the U.S. (source: Comscore Media Metrix® Multi-Platform, Automotive – Information/Resources, Total Audience, Q3 2020, U.S. (Competitive set includes: CarGurus.com, Autotrader.com, Cars.com, TrueCar.com)). In addition to the United States, CarGurus operates online marketplaces in Canada and the United Kingdom. In the United States and the United Kingdom, CarGurus also operates the Autolist and PistonHeads online marketplaces, respectively, as independent brands. To learn more about CarGurus, visit www.cargurus.com.
About CarOffer:
CarOffer is the automotive industry’s first instant trade platform for modern day retailing that helps dealers trade more, buy more and make more. Leveraging the power of data, national scale, and the company’s proprietary Buying Matrix™ technology, the platform helps dealers acquire and exchange used inventory more efficiently. Developed by one of the recognized pioneers in inventory management software, Bruce Thompson, the CarOffer platform is a singular seamless solution that can replace numerous service providers commonly used by dealerships, offering significant instant savings and efficiencies. For more information, visit www.caroffer.com.
