Vroom to Buy CarStory for $120 Million

Vroom will acquire Vast Holdings, the owner of CarStory, for about $120 million.
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Vroom  (VRM) - Get Report announced Tuesday that it will acquire Vast Holdings, the owner of CarStory, which provides AI-powered used car information, for about $120 million. 

The purchase is for 60% in cash and 40% in Vroom common stock. 

"At Vroom, we’ve built a platform made for scale and driven by data. As car buyers and sellers across the country increasingly turn to ecommerce solutions, CarStory will strengthen and extend the reach of our digital retailing platform, and together we will accelerate the transformation of the massive used auto industry,” said Paul Hennessy, Vroom CEO, in a statement.

Shares of Vroom, the online car retail company, were rising 1.04% on Tuesday to $35.81. 

The purchase is expected to close in January. The acquisition is  expected to be neutral to Vroom's operating results in 2021. 

CarStory leverages more than 7 million listings per day and more than 18 million consumer sessions per month. 

“Our mission has always been to provide data and services that enable our partners to grow and that won’t change,” said John Price, CEO of CarStory. “We believe joining the Vroom team significantly enhances our ability to transition an industry to digital retailing and will allow our partners to reach their goals even faster.”

Last month, Vroom reported a third-quarter loss of nearly $38 million, or 29 cents a share on an adjusted basis on revenue that fell 5.1% to $323 million. Analysts were expecting the company to report a loss of 37 cents a share on revenue of $311 million. 

However, Vroom also said that fourth-quarter sales would range between $372 million and $414 million, while its net loss would widen to between 41 cents and 35 cents per share.