Automobiles.com drawing curiosity from AutoTrader owners Cox, Apax, report says


Web site could be really worth $ 2.5 billion, insider says

March 12, 2014 – 7:36 am ET

NEW YORK (Bloomberg) — Cox Enterprises Inc., the media holding organization, and London-based mostly buyout company Apax Partners LLP — the owners of AutoTrader — are interested in bidding for automobile-sales internet site Automobiles.com, people with expertise of the matter advised Bloomberg.

The group of newspaper publishers that is doing work with Moelis & Co. to explore a sale of Vehicles.com hasn’t formally solicited bids for the business but, said the individuals, asking not to be identified simply because the data is private. The website, visited by a lot more than 11 million potential vehicle buyers a month, may fetch $ 2.5 billion in a sale, one particular of the individuals stated.

Automobiles.com, which was started out in 1998, lets consumer examine costs, compare versions and read reviews of car dealers. The company would fit with the AutoTrader.com Web sites that Cox Enterprises and Apax previously personal. Apax is the majority owner of Trader Media Group, which operates AutoTrader in the U.K. Cox Enterprises controls the e-commerce business in the U.S.

A spokesman for Apax declined to comment on its interest in Cars.com. Elizabeth Elmstead, a spokeswoman for Cox Enterprises, stated the firm doesn’t comment on speculation.

But she added that the reports about Cars.com’s owners weighing a sale “confirms that the automotive solutions sector is an attractive, expanding segment.”

A spokeswoman for Classified Ventures, the entity that owns Automobiles.com, didn’t respond to e-mail and mobile phone messages in search of comment on the sale. Classified Ventures is backed by 5 newspaper publishers: Gannett Co., McClatchy Co., Tribune Co., AH Belo Corp. and Graham Holdings Co.

Relative value

At $ 2.5 billion, Cars.com would be valued at about 5 to 6 instances yearly sales of $ 400 million to $ 500 million, according to estimates from Bloomberg Industries.

Cox Enterprises this yr bought a 25 percent stake in AutoTrader Group from Providence Equity Partners for about 6 times income, the data present. A man or woman with information of that deal stated the stake was valued at about $ 1.8 billion, putting AutoTrader’s total worth at about $ 7 billion.

Newspapers have steadily lost cash and readership considering that hitting a product sales peak in 2005. Classifieds advertising has been hardest hit, dropping by a lot more than half in between 2000 and 2008 to $ 9.9 billion, according to Pew Research.

Now, seeking to capitalize on the marketplace for on the internet listings, newspaper companies are offering off businesses started whilst they had been in better fiscal shape. Classified Ventures, the joint venture, sold yet another listings web site, Apartments.com, for about $ 585 million.

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