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Dealertrack in $1B deal to buy rival

Lake Success-based Dealertrack Technologies Inc. said it is buying rival for about $1 billion.

The company, which manufactures software for car dealers, will pay about $620 million in cash plus roughly 8.7 million in shares of its stock for, a Burlington, Vt., company that designs and runs automotive websites.

The acquisition is among the largest in Dealertrack's 12-year history.

"We both have been pioneers in bringing innovation to automotive marketing," Dealertrack chairman and chief executive Mark O'Neil said during a call with analysts. "This combination will significantly increase our revenue growth opportunities."

The deal is scheduled to close in the first quarter of 2014. Dealertrack announced the acquisition following the close of regular trading Thursday on Wall Street. Shares of Dealertrack rose more than 7 percent, to $45.89, in after-hours trading. As of Thursday's close, before the deal announcement, its shares were up 49 percent year to date. operates websites for about 7,000 dealerships nationwide and expects to generate roughly $230 million in sales this year, up 25 percent from 2012.

Analysts expect Dealertrack's 2013 revenue to hit about $480 million, up about 24 percent from last year. Its stock market value is $1.88 billion, according to data from Bloomberg.

Founded in 1998, has about 830 employees in Burlington and Manhattan Beach, Calif.

Dealertrack employs more than 2,500 people, including more than 400 on Long Island. The company does not expect the acquisition to impact its local operations, a spokesman said.

After the deal closes, Dealertrack will continue to use the name. The company's chief executive, Rick Gibbs, will join Dealertrack as an executive vice president and head of the digital marketing solution team.

"This is a very exciting opportunity for," Gibbs said. "By combining our strengths with Dealertrack, we will be able to enhance our marketplace offering with an integrated, end-to-end solution that will help bring the automotive retailing industry to a new level of efficiency and performance."

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