TrueCar, a Santa Monica online publisher of new and used vehicle pricing, said that it has acquired ALG Inc., a provider of automotive residual value information.
The transaction announced late Monday is structured as a tax-free reorganization. ALG’s owner, DealerTrack Holdings, will receive 15 percent equity interest in TrueCar with the ability to increase its stake to 19.9 percent in the future. Other financial terms were not disclosed.
ALG will operate as an independent subsidiary of TrueCar and remain at its Santa Barbara headquarters. TrueCar said that the agreement includes a perpetual, royalty-free license for DealTracker to continue to have access to certain ALG intellectual property and data for its own products and services. DealerTrack, a public company based in Lake Success, N. Y., operates the nation’s largest online auto credit application network as well as other dealership tools.
TrueCar, whose management team earlier founded the online buying service CarsDirect, works with a network of more than 5,000 dealerships to provide “no-haggle” pricing information to organizations such as the Auto Club and American Express.
“We believe that in combination with ALG’s core competency of providing industry leading residual values for the automotive market, TrueCar’s business will be enhanced and continue to generate exceptional growth as more of the car buying process moves online,” TrueCar Chief Executive Scott Painter said in a statement.