Cox Sells 25% of AutoTrader.com
Cox Enterprises has sold 25 percent of AutoTrader.com to Providence Equity Partners, a company that manages $22 billion in its portfolio and whose Web site says it likes to take equity shares “between $250 million and $2.5 billion.” Terms were undisclosed. Providence has shares in a wide range of companies, including Univision, NexTag, Hulu and WhitePages.com.
The deal with Providence comes after a tumultuous period in the auto industry that has seen AutoTrader pull back from tentative plans to be spun off entirely with a valuation of $1 billion plus. AutoTrader recently reported annual income of $629 million for 2009, down 3 percent from 2008. The revenue picture, however, is expected to brighten as the auto industry begins to recover from a multi-year slump.
In addition to Providence, Kleiner Perkins has an undisclosed share in AutoTrader dating from its launch in 1997. Those shares are estimated at 8 percent to 10 percent. According to an AutoTrader spokesperson, there are no current plans for KP to divest its shares.
Under terms of the deal, Cox maintains operating control of AutoTrader, but Providence will assume two seats on AutoTraders’ board of directors. CEO and President Chip Perry said in a release that Providence’s “support will enable us to pursue the many organic growth opportunities, as well as strategic acquisitions, that will help improve the products and services we offer our customers.”