AutoTrader.com plans to acquire Kelley Blue Book
Automobile classified advertising site AutoTrader.com plans to acquire one of the most venerable names in car shopping — Kelley Blue Book.
The pending deal, announced Tuesday, would give Atlanta-based AutoTrader two of the leading advertiser-supported go-to destinations for car buyers. The AutoTrader site, which launched in 1998, gets 15 million visitors a month viewing its buy and sell ads from dealers and consumers, the company said.
Kelley Blue Book of Irvine provides price information on new and used cars. It was started in 1926 by Los Angeles car dealer Les Kelley as a booklet that showed prices on vehicles of the era, including a new Packard sedan limousine that could be bought for about $3,825 and a 1921 Nash car worth about $50, according to a history of the company on its website.
Executives of the privately held companies declined to disclose the terms of the transaction. As part of the deal, AutoTrader would also get Kelley Blue Book’s CDMdata, a hardware and software provider for the auto industry, and CDM Dealer Services, which sells inventory-management software.
The deal, which the companies expect to go through by the end of the year, requires regulatory approval.
AutoTrader has about 2,100 employees; Kelley Blue Book has about 500.
“There are no plans for any job eliminations as a result of this transaction in either company,” AutoTrader Chief Executive Chip Perry said.
Kelley Blue Book’s pricing information format will be kept, Perry said, but classified ads for specific cars will be added.
About 80% of car buyers do research online but only about 25% of auto industry advertising dollars go to online venues, Perry said.
“This is kind of a disconnect between where consumers get value in the car buying process and where auto dealers spend their money,” he said. “We are looking for ways to expand our functionality online.”
Kelley Blue Book will stay in Irvine and operate as a subsidiary of AutoTrader, said Kelley Blue Book CEO Paul Johnson, who will stay with the company.
“You will not see links going back and forth between Kelley and AutoTrader,” Johnson said. “The two sites have unique positions in the marketplace.”
Perry said AutoTrader would work carefully after the acquisition of Kelley Blue Book to maintain the pricing site’s reputation as an independent, unbiased guide.
