Irvine’s Autobytel to Pay $32 Million for Rival CarSmart

Online auto referral service Autobytel.com Inc. said Friday that it has agreed to acquire rival CarSmart.com in a $32-million cash-and-stock deal.

The acquisition, which the company hopes to finalize in December, will allow Irvine-based Autobytel to expand its network of car dealers and boosts the company’s customer base through CarSmart’s marketing relationships.

Under the terms of the deal, Autobytel will pay 1.8 million shares of its stock and $3 million in cash to acquire CarSmart’s parent company, San Ramon, Calif.-based AIN Corp., which is privately held.

CarSmart had about $5 million in revenue during the last 12 months and suffered a “small loss” after a break-even year, although those results have not yet been audited, Autobytel officials said.

CarSmart and Autobytel would operate as separate brands, allowing Autobytel to test new initiatives on CarSmart without affecting the flagship Autobytel brand, officials said.

But perhaps most valuable is CarSmart’s network of 1,000 auto dealerships, which would complement Autobytel’s own 2,000-dealer network because there is relatively little overlap.

“It allows Autobytel to grow without putting in a heck of a lot of time,” said Adam Weiner, an analyst with the market research firm Gomez Advisors. “It makes a lot of sense for them to absorb CarSmart and the brand name.”

CarSmart doesn’t have the brand recognition that Autobytel has, Weiner said, but CarSmart’s relationships with other Internet sites, including America Online, Disney’s Go Network, AltaVista, LookSmart and Snap.com, give CarSmart a significant ability to draw customers.

Operating CarSmart separately from Autobytel may be more cumbersome and expensive than merging the two, but it also keeps CarSmart’s relationships with the other Internet sites intact, Weiner said.

Autobytel’s stock on Friday closed unchanged at $16 in Nasdaq trading.