Continuing its strategy of expanding beyond vehicle transactions, Irvine-based Autobytel.com Inc. said Thursday it will acquire the publisher of the Chilton series of automobile repair manuals for $17.5 million in cash and stock.
Autobytel, one of the largest automotive e-commerce firms, also said it lost $6 million in the second quarter ended June 30, nearly double the $3.1-million loss it had during the same period last year.
Revenue for the quarter rose 70%, to $9.2 million from $5.4 million.
The loss of 33 cents per share was an improvement on the 37 cents it lost for each share during the same period last year, and it beat analysts' expectations of a 40-cent loss, according to First Call Corp.
The company's acquisition of privately held W.G. Nichols of West Chester, Pa., dovetails with the vehicle repair and service section that opened last month on Autobytel's Web site. Autobytel is paying $13 million in cash and 253,923 shares of stock worth $4.5 million Thursday to acquire the publisher, which had first-quarter revenue of $3.75 million.
Unlike other Internet firms that have made acquisitions solely with stock or new debt, Autobytel is dipping into its $92-million cash reserves for the Nichols acquisition in part because of the poor performance of its stock.
Autobytel went public in March, selling its shares for $23 each. On Thursday, they rose $1.25, or 8%, to $17.75 in Nasdaq trading. The company made its announcements after the market closed.
"Our concern is that we believe our stock is greatly undervalued and we don't want to part with too much of it right now," said Mark Lorimer, Autobytel's chief executive.
Several of Nichols' investors also wanted to cash out, Lorimer said. Autobytel hopes to close the deal by the end of September.
Nichols publishes more than 180 publications and the Chilton brand has been detailing general and specific auto repairs and procedures since 1925.
Autobytel plans to use the Chilton data to send its subscribers reminders to service their cars and to help people service their cars. It will take between six and nine months to integrate most of the Chilton data into the Autobytel site.
Nichols, with its 35 employees, will operate as a wholly owned subsidiary of Autobytel and will continue to be led by Richard Van Dalen, its chief executive.