NEW YORK (TheStreet) -- Dealertrack Technologies (TRAK) shares are jumping 57.67% to $62.91 in early market trading on Monday after the web-based software solutions and services provider to the automotive industry agreed to be purchased by privately held Cox Automotive for $4 billion.
The deal is for $63.25 per share and is expected to close in the third quarter this year.
Cox Automotive is the owner of automotive research company Kelley Blue Book and is the largest wholesale vehicle auction company in the U.S. with over 100 locations worldwide.
"This is a great investment in our customers and in the auto industry. We have long admired the Dealertrack team and its highly respected brands. Integrating our platforms will be a big step forward in our shared vision of providing open, cost-effective and efficient solutions for dealers, lenders, manufacturers and consumers," said Cox president Sandy Schwartz.
Cox Automotive is a unit of Cox Enterprises and employs approximately 24,000 people worldwide.
Dealertrack is based in New Hyde Park, NY and has about 4,000 employees.
TheStreet Ratings team rates DEALERTRACK TECHNOLOGIES INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate DEALERTRACK TECHNOLOGIES INC (TRAK) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself."