Autobytel Inc. (Nasdaq: ABTL), pioneer of the automotive Internet and the company dedicated to connecting automotive consumers with dealers and manufacturers, today announced it has acquired Ft. Lauderdale-based AutoUSA, a longstanding, premier Web-based auto leads and services provider, from AutoNation, Inc. (NYSE: AN). The purchase price included $10.0 million in cash, a $1.0 million, 6% convertible note payable in one lump sum in five years and convertible to Autobytel common stock at a conversion price reflecting a 20% premium over the price of Autobytel’s common stock on the date of closing, and warrants giving AutoNation the right to purchase approximately $1.0 million of Autobytel’s common stock at an exercise price reflecting a 5% premium over the price of the stock on the date of closing. The transaction was financed by Union Bank, N.A. through a newly established $9.0 million senior secured term loan, and by drawing on Autobytel’s existing secured working capital revolver. Both the term loan and the revolver carry interest at a rate of LIBOR plus 2.5%. The term loan is amortized over a period of four years. AutoUSA generated 2013 revenues of approximately $30.0 million, with positive operating income and cash flow. The company believes that the transaction will be accretive to Autobytel’s 2014 results. Autobytel said the acquisition expands its reach and influence in the industry by increasing its national new and used car dealer network to more than 5,200 from approximately 3,800, while boosting its business with auto manufacturers. It also enables the company to offer its new mobile and SaleMove products to a larger customer base, while continuing to build on relationships with OEMs and large dealer groups, including the AutoNation family of dealers. Autobytel, which was founded in 1995 by former Southern California car dealer Pete Ellis, has again grown to become one of the most influential automotive services organizations, providing high quality leads and innovative marketing and mobile services to dealers and OEMs. The company serves a critical role in the industry in helping car buyers find the right vehicle while delivering highly relevant consumer purchasing information to its industry partners.
Phil DuPree, President of AutoUSA, has joined Autobytel as Executive Vice President, President of Dealer Services. As an inducement for joining the company, DuPree was granted an option to acquire 40,000 shares of Autobytel common stock at an exercise price equal to the closing price of Autobytel’s common stock on the acquisition closing date. The option will initially vest based on certain financial performance criteria related to Autobytel’s dealer services group and then on DuPree’s time of service with Autobytel.“AutoUSA brings a new, high quality client base to the Autobytel family and strengthens our existing relationship with AutoNation, which is the largest U.S. automotive retailer,” said Jeff Coats, Autobytel’s president and CEO. “The transaction solidifies our leadership role in the industry, enabling us to offer an even larger base of dealers and automakers top quality products, including leads that convert to sales at nearly three times an estimated industry average, and a wide range of mobile products designed to sell more cars. “AutoUSA represents an outstanding fit with Autobytel. In addition to its core leads business, AutoUSA’s suite of complementary third-party, Web-based services includes payment-based pre-qualification tools, incentive programs and other products and services designed to help dealer customers and manufacturers increase their sales,” Coats added. “Since 2000, AutoUSA has developed very strong relationships with dealers across the country. The combination of Autobytel and AutoUSA adds strength to both organizations and represents an opportunity for consolidation in an industry segment that remains fragmented,” said Mike Maroone, president and chief operating officer of AutoNation, Inc. “This combination benefits automotive consumers, dealers and manufacturers, alike.” As previously announced, in addition to AutoUSA, Autobytel also recently acquired Advanced Mobile, LLC, now known as Autobytel Mobile, which provides a full lineup of auto industry mobile products and services such as mobile apps, mobile websites, Send2Phone capabilities and text message marketing, and TextShield, a web-based portal that allows dealers to centrally manage text communications. Also as previously announced, the company recently made a strategic investment in SaleMove, which enables auto dealers and manufacturers to enhance the online shopping experience by interacting with consumers in real-time. These new services will be available to Autobytel’s expanded network of automotive dealers and manufacturers.
About Autobytel Inc.Autobytel Inc. provides high quality consumer leads and associated marketing services to automotive dealers and manufacturers throughout the United States and offers consumers robust and original online automotive content to help them make informed car-buying decisions. The company pioneered the automotive internet in 1995 with its flagship website www.autobytel.com and has since helped tens of millions of automotive consumers research vehicles; connected thousands of dealers nationwide with motivated car buyers; and helped every major automaker market its brand online.Investors and other interested parties can receive Autobytel news releases and invitations to special events by accessing the online registration form at http://investor.autobytel.com/alerts.cfm. Forward-Looking Statements Disclaimer The statements contained in this press release that are not historical facts are forward-looking statements under the federal securities laws. These forward-looking statements, including, but not limited to, expectations of the timing that the AutoUSA transaction will be accretive to Autobytel’s financial results, are not guarantees of future performance and involve assumptions and risks and uncertainties that are difficult to predict. Actual outcomes and results may differ materially from what is expressed in, or implied by, these forward-looking statements. Autobytel undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Among the important factors that could cause actual results to differ materially from those expressed in, or implied by, the forward-looking statements are changes in general economic conditions; the financial condition of automobile manufacturers and dealers; disruptions in automobile production; changes in fuel prices; the economic impact of terrorist attacks, political revolutions or military actions; failure of our internet security measures; dealer attrition; pressure on dealer fees; increased or unexpected competition; the failure of new products and services to meet expectations; failure to retain key employees or attract and integrate new employees; actual costs and expenses exceeding charges taken by Autobytel; changes in laws and regulations; costs of legal matters, including, defending lawsuits and undertaking investigations and related matters; and other matters disclosed in Autobytel’s filings with the Securities and Exchange Commission. Investors are strongly encouraged to review the company’s Annual Report on Form 10-K for the year ended December 31, 2012 and other filings with the Securities and Exchange Commission for a discussion of risks and uncertainties that could affect the business, operating results or financial condition of Autobytel and the market price of the company’s stock.