TrueCar Agrees to Sell its ALG Subsidiary to J.D. Power for $135 Million
- Board of Directors authorizes
$75 millionshare repurchase program
- Proceeds from sale of ALG used to support this repurchase program, fortify balance sheet and maintain strategic flexibility
“Today’s announcement is a tremendous outcome both in terms of the value delivered to our shareholders and the potential ALG has with its new owner,” said
TrueCar’s Chief Financial Officer,
- Total consideration of
$135 millioncomprised of: (i) an upfront cash payment of $112.5 millionat closing, (ii) up to $7.5 millionpayable in early 2021 based on ALG’s 2020 revenue and (iii) up to $15 millionpayable in 2023 based on 2022 revenue
- Sale multiple of 7x LTM ALG revenue unlocks immediate value for
- Reinforces management’s focus on core business and commitment to creating shareholder value and is consistent with other steps taken towards that end
The transaction was unanimously approved by TrueCar’s Board of Directors and is expected to close by the end of 2020. The closing is subject to customary closing conditions as well as regulatory review and approval.
TrueCar is a leading automotive digital marketplace that enables car buyers to connect to our nationwide network of Certified Dealers. We are building the industry's most personalized and efficient car buying experience as we seek to bring more of the purchasing process online. Consumers who visit our marketplace will find a suite of vehicle discovery tools, price ratings and market context on new and used cars – all with a clear view of what's a great deal. When they are ready, TrueCar will enable them to connect with a local Certified Dealer who shares in our belief that truth, transparency and fairness are the foundation of a great car buying experience. As part of our marketplace, TrueCar powers car-buying programs for over 250 leading brands, including AARP, Sam’s Club, and American Express. Nearly half of all new-car buyers engage with TrueCar powered sites, where they buy smarter and drive happier. TrueCar is headquartered in Santa Monica, California, with offices in Austin, Texas and Boston, Massachusetts.
Danny VivierVice President, Investor Relations & Strategic Finance email@example.com (760) 505-9654 Shadee Malekafzali Senior Director, Public Relations firstname.lastname@example.org (925) 408-0394
Source: TrueCar, Inc.