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DealerTrack Announces Pricing Of Private Offering Of $175 Million Of 1.50% Senior Convertible Notes

NEW YORK, Feb. 28, 2012  /PRNewswire/ -- DealerTrack Holdings, Inc. (Nasdaq: TRAK) ("DealerTrack") announced today the pricing of its private offering of $175 million aggregate principal amount of 1.50% senior convertible notes due 2017 (the "Notes") to be sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). DealerTrack has granted the initial purchasers of the Notes an option to purchase, within a 13 day period beginning on, and including, the date it first issues the Notes, up to an additional $25 million aggregate principal amount of Notes. The offering is expected to close on March 5, 2012, subject to certain closing conditions.


The Notes will be DealerTrack's senior unsecured obligations, subordinated in right of payment to existing and future secured senior indebtedness. The Notes will bear interest at a rate of 1.50% per year, payable semi-annually in cash on March 15 and September 15 of each year, beginning on September 15, 2012. DealerTrack will not have the right to redeem the Notes prior to maturity. The Notes will mature on March 15, 2017, unless earlier repurchased or converted. In the event of a fundamental change prior to maturity, the holders of the Notes will have the ability to require DealerTrack to repurchase all or any portion of their Notes for cash at a repurchase price equal to 100% of the principal amount of the Notes being repurchased plus any accrued and unpaid interest.

Prior to October 15, 2016, the Notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time until the second scheduled trading day immediately preceding the maturity date. Upon conversion, holders will receive, at DealerTrack's discretion, cash, shares of DealerTrack common stock or a combination thereof. The initial conversion rate will be 26.7618 shares of DealerTrack common stock (subject to customary adjustments) per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $37.37 per share of DealerTrack common stock, which represents a conversion premium of approximately 33.50% to the closing sale price of $27.99 per share of DealerTrack common stock on the NASDAQ Global Select Market on February 28, 2012. In addition, following certain corporate transactions that occur prior to the maturity date, DealerTrack will, in certain circumstances, increase the conversion rate for a holder that elects to convert its Notes in connection with such a corporate transaction.

In connection with the offering of the Notes, DealerTrack has entered into one or more privately negotiated convertible note hedge transactions with one or more dealers, which may include one or more of the initial purchasers of the Notes or their respective affiliates (the "hedge counterparties"). The convertible note hedge transactions will cover, subject to customary anti-dilution adjustments, the number of shares of DealerTrack common stock that will initially underlie the Notes. DealerTrack has also entered into separate privately negotiated warrant transactions with the hedge counterparties.

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