March 20, 2018 – In a media release today, Auto/Mate stated the Federal Trade Commission (FTC) has blocked Auto/Mate Dealership System’s pending acquisition by CDK Global. In April 2017, the two companies signed an agreement outlining terms of a sale that was subject to FTC approval. After an extensive 11-month review, the FTC decided that it was in the best interest of auto dealers to have Auto/Mate remain as a strong competitor in the marketplace.
“It seems that the FTC thought we were too unique and too well positioned to grow and compete, and that allowing CDK to acquire us would take out the only viable competitor to them outside of R&R,” said Larry Colson, Auto/Mate’s Managing Partner. “Our story has always been one of David vs. Goliath and now we are back to doing business as usual, much to the delight of our customers and employees.”
Late in 2016, Auto/Mate’s shareholders were alerted by Presidio Technology Partners, its financial advisor, that a potentially attractive valuation for the company might be possible in the market. During the sales process that followed, CDK Global made an offer that could not be ignored. Subsequently, the parties reached a definitive agreement that was subject to FTC approval. That approval was not granted.
“While we are disappointed to have spent so much time and money on the now abandoned transaction, we look forward to the future with renewed vigor and passion,” Colson said.
“It’s no secret that in recent years we had made substantial inroads into the customer bases of both CDK and Reynolds & Reynolds, switching several large auto groups that have been their bread and butter onto our system,” said Mike Esposito, Auto/Mate’s President and CEO.
Auto/Mate is no longer for sale, and the shareholders are not considering any other offers. “This decision and the governmental review process we just completed was arduous, and quite frankly, we don’t have the stomach to go through it again,” Esposito added. “Auto/Mate’s senior management team and I will remain at the helm.”