DealerTrack to Sell ALG to TrueCar
LAKE SUCCESS, NY – DealerTrack Holidings has signed an agreement to sell its subsidiary, ALG Inc., to TrueCar Inc., according to a news release from ALG Inc. Related to the sale DealerTrack entered into additional commercial arrangements with TrueCar, including a perpetual, royalty-free license for DealerTrack to use certain ALG intellectual property and data.
DealerTrack will receive a 15-percednt equity interest in TrueCar and warrants to increase its ownership up to 19.9 percent. As part of the transaction, DealerTrack will have the limited right to appoint a director to TrueCar's Board.
The sale is expected to close in the fourth quarter, ALG’s release stated. DealerTrack stated it expects to recognize a pre-tax gain for GAAP purposes of at least $40 million on the sale, but does not expect this transaction to have an impact on 2011 non-GAAP guidance.