SANTA MONICA, Calif., Aug. 22, 2011 /PRNewswire/ -- TrueCar, Inc. the only transparent publisher of real-time new and used vehicle transaction data in the US market, has announced that it has signed a definitive agreement to acquire ALG, Inc. a subsidiary of DealerTrack Holdings, Inc. (NASDAQ: TRAK) and the industry-leading source for automotive residual values.
The transaction is structured as a tax-free reorganization, and in consideration for the sale of ALG, DealerTrack will receive equity interest in TrueCar and warrants to increase its ownership interest in the future. ALG will operate as an independent subsidiary of TrueCar and continue to be headquartered in Santa Barbara, Calif. In connection with the sale, DealerTrack has entered into additional commercial arrangements with TrueCar, including a perpetual, royalty-free license for DealerTrack to use certain ALG intellectual property and data in its products and services.
Scott Painter, chief executive officer of TrueCar, Inc. commented, "We believe that, in combination with ALG's core competency of providing industry-leading residual values for the automotive market, TrueCar's business will be enhanced and continue to generate exceptional growth as more of the car buying process moves online. In addition, we believe that our acquisition of ALG will further develop our relationships with auto manufacturers." Painter continued, "Lastly, we are pleased to be entering a strategic partnership with DealerTrack which includes a two year commitment to help us effect a smooth transition of the ALG business."
Run independently of TrueCar's operations, ALG's data and expertise will nonetheless help accentuate TrueCar's strength -- the new and used car pricing that it provides to consumers through TrueCar.com, Clearbook.com and its well-respected affinity auto buying programs with USAA, American Express, AAA and many others.
Mark F. O'Neil, chairman and chief executive officer of DealerTrack, commented, "This transaction exemplifies our strategy of effectively allocating capital to maximize value for DealerTrack stockholders. We are not only selling a business which we have grown significantly since we acquired it back in 2005, we are making an investment in a high-growth, progressive company that is positively impacting the way cars are retailed in the U.S. market."
"By working alongside ALG, we can achieve deeper and more meaningful partnerships with auto manufacturers," said Bernie Brenner, Chief Strategy Officer of TrueCar. "Through the transparency and effectiveness of TrueCar and ALG data we will create an efficient environment where the auto industry sells more cars and dealers can thrive in an ever-changing, competitive marketplace."
About TrueCar, Inc.
TrueCar, Inc. is an automotive solutions provider focused on changing how cars are sold by providing a significantly better customer experience while helping qualified dealer partners to gain incremental market share and reduce costs. As a transparent, visual publisher of new car transaction data, TrueCar.com price reports help both dealers and consumers to agree on the parameters of a fair deal by providing an accurate, comprehensive and simple understanding of what others actually paid for the identically equipped new car over the last 30 days both locally and nationally.
TrueCar, Inc. works with a national network of over 5,000 Certified Dealers that provide up-front, no-haggle, competitive pricing to assist some of the nation's largest and most well respected membership and service organizations to meet the auto buying needs of their members and customers. These partnerships include American Express, AAA, USAA and more than 60 others. Collectively these audiences represent over 1M in-market customers each month.
TrueCar, Inc. is headquartered in Santa Monica, CA and has offices in San Francisco. The company was founded in 2005 and has been profitable since 2009. With 131 percent annual growth since 2006, TrueCar has driven over 300,000 sales and is developing a suite of transaction oriented products and services centered on transparency and radical clarity as a result of comprehensively analyzing market data and information. You can follow TrueCar on Twitter and become a fan of TrueCar on Facebook.
About DealerTrack (www.dealertrack.com)
DealerTrack's intuitive and high-value software solutions and services enhance efficiency and profitability for all major segments of the retail automotive industry, including dealers, lenders, OEMs, agents and aftermarket providers. DealerTrack, whose solution set for dealers is the industry's most comprehensive, operates the largest online credit application network in the United States, connecting over 17,000 dealers with more than 1,000 lenders. DealerTrack's Dealer Management System (DMS) provides dealers with easy-to-use tools and real-time data access to enhance their efficiency. DealerTrack's Inventory offerings provide vehicle inventory management and merchandising solutions to help dealers drive higher in-store and online traffic with state-of-the-art, real-time listings – leading to accelerated used-vehicle turn rates and higher dealer profits. DealerTrack's Sales and F&I solutions allow dealers to streamline the entire sales process as they structure deals from a single integrated platform. Its Compliance offering helps dealers meet legal and regulatory requirements, and protect their assets. DealerTrack also offers additional solutions for the automotive industry, including electronic motor vehicle registration and titling applications, paper title storage, and digital document services. DealerTrack's family of companies also includes data and consulting services providers ALG and Chrome Systems. For more information visit: www.dealertrack.com.
About ALG (www.alg.com)
Based in Santa Barbara, California, ALG is a leading provider of data and consulting services to the automotive industry. ALG publishes the "Automotive Lease Guide" — the standard for residual value projections in North America, and has been forecasting automotive residual values for over 45 years in both the U.S. and Canadian markets. ALG is a company of DealerTrack Holdings, Inc.
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SOURCE TrueCar, Inc.