NEW YORK (TheStreet) -- Cox Automotive, a subsidiary of privately held Cox Enterprises, on Monday said it has said it has agreed to acquire DealerTrack Technologies (TRAK) for $4 billion cash, broadening Cox Automotive's already large footprint as a vendor to new and used-car dealerships in the U.S.
As the owner of Manheim auto auctions, Kelley Blue Book, AutoTrader and other properties related to buying and selling vehicles, Cox now adds computer services that tie dealers to manufacturers, lenders and parts suppliers to its product portfolio. The company has about 24,000 employees.
The transaction will be financed through a new $1.85 billion loan and existing credit facilities. Cox is based in Atlanta.
Through DealerTrack's Dealer.com subsidiary, the transaction deepens Cox's foothold in the rapidly expanding business of online retail sales by dealers. In March 2014, DealerTrack acquired digital-marketing giant Dealer.com for $1 billion
Increasingly, shoppers are choosing to browse used and new-vehicle inventories via the Internet, determine accurate market prices for vehicles and negotiate sales without visiting dealerships, although most final transactions are conducted face-to-face at dealerships.
The prices and values for vehicles have grown more transparent to consumers and lenders as dealers have shared transaction information with a number of research companies and online ventures such as TrueCar (TRUE).
Sandy Schwartz, president of Cox Automotive, called DealerTrack's portfolio of services "complementary," a way to deliver better services to consumers, dealers and manufacturers. Cox Automotive had about $5 billion in revenue last year; it was the second-largest division of the parent company, which owns many media properties including the Atlanta Journal-Constitution.