Online auto retail referral site Autobytel.com(Nasdaq: ABTL) announced today that it has agreed to acquire A.I.N. Corporation, the owner of CarSmart.com, in a cash and stock deal valued at $31.8 million (US$).
The Irvine, California-based company said that it will continue to operate the Web sites of the two auto referral retailers independently, but will share content, marketing programs, technology infrastructure and dealer support services.
The acquisition is expected to close in the fourth quarter of this year. Autobytel claims that it sees the acquisition of the third most-visited online auto retail referral site as an opportunity to consolidate its hold on top of the industry.
“The combined strength of the Autobytel.com and CarSmart.com brands creates an industry powerhouse in terms of market penetration, Web reach and automotive services,” said Autobytel CEO Mark Lorimer. “Our sites will be platforms for driving innovation in this industry and creating business models to serve various segments of the market.”
The deal calls for Autobytel to acquire the privately-held A.I.N. for $3 million in cash and 1.8 million shares of common stock. Autobytel went public in March.
Autobytel claims to be the largest auto referral site on the Internet. Since its launch in 1995, it has processed 3.5 million purchase requests from its network of 2,865 auto dealers, almost as many as that of its two closest competitors combined, the company said.
The company booked second quarter revenues of $9.2 million and a net loss of $6 million. It also announced that its $15 million advertising campaign, launched in July, helped drive up purchase requests to over 500,000 for the quarter and increased direct traffic to its site.
Autobytel also has auto referral programs in Canada, Sweden and the United Kingdom and has plans to launch its service in Japan, Norway, Finland and Denmark.
Access To Marketing Agreements
San Ramon, California-based CarSmart currently generates 43,000 purchase requests a month from its network of over 1,000 dealers. The company makes its money on subscription fees from dealers, from its proprietary content, its credit union program and from ancillary services like finance and insurance.
The company has marketing agreements with seven of the top 20 portals, including AOL, the Go Network and AltaVista, and is the car buying service and software provider for 240 credit unions with over 10 million members.
Autobytel’s share price closed Thursday at $16, and was trading at 15-1/8 early today. At that level, the deal would be worth more than $30 million.