Industry News & Trends

ADP Buys Cobalt Group – Announcement

ADP Dealer Services Group is planning to buy Cobalt Group Inc.

According to Dealer Communications – Friday July 9 will be the announcement of ADP Dealer Services plan to purchase Cobalt Group Inc.

Apparently discussions have been ongoing for nearly two years between ADP and Cobalt’s primary investor Warbug Pincus. The acquisition is expected to close sometime in the third quarter.

As of right now, there is no word on the sale price, though Cobalt is generating an estimated $250 – $270 million in revenue. According to Dealer Communications ADP could be paying in the neighborhood of $350 – $400 million.

This will be the second major dealer website provider purchase since 2006, when ADP bought BZ Results. The article also go on to say…

ADP plans to keep both brands separate with Cobalt maintaining its Tier One and Tier Two relationships and BZ Results selling directly to the Tier Three/ dealership level.

Cobalt CEO and founder John Holt continue on as vice president of ADP’s Digital Marketing Group which already consists of Cobalt, Dealix and BZ Results.

Here is a link to the entire article on Dealer Communications website  – Nice Job Cliff Banks on this breaking news!

What do you think of this purchase?

Does it make sense for ADP to make such a purchase and what exactly do you think they will get from this?

B
I think the purchase is a smart move to consolidate the fragmented automotive website and digital marketing industry. With Cobalt's OEM deals and ADP's efforts to refresh their website technology and expand their digital marketing services with SkySong, this deal may not have too much overlap.


The key with any merger of this size is to see how the cultures integrate and how the technology leaders connect their technology resources.
D
It amazes me that more people haven't commented on this story. I can think of about 400 million better things to do with my money...but I guess I will join everyone else and go with the company line of..."no comment".
J
  • J
    Jeff Kershner
  • July 14, 2010
We have a few more comments over on the forum where the news was also posted.
<a href="http://forum.dealerrefresh.com/f40/adp-buys-cobalt-1093.html" rel="nofollow">http://forum.dealerrefresh.com/f40/adp-buys-cobal...</a>

I think most of us are getting used to these transactions and are like &quot;whatever&quot;. . This is news but yet it&#039;s not something we wouldn&#039;t expect. David, even you have fallen into this - you of all people, didn&#039;t even comment. :)

There is some overlapping here but I&#039;m sure ADP wanted the OEM field that Cobalt somehow has been playing for several years (though slowly loosing).

I would agree, way more better things to do with 400 million.
R
  • R
  • July 14, 2010
Well personally I don&#039;t agree with it. We use ADP and their CRM sytem with a mixture of other &quot;can&#039;t live without product&#039;s&quot; that never seem to work the way they are suppose to. And I am a firm believer or perfect what you have first before adding more. While the CRM is the only system I really use constantly it is also probably the most frustrating. I would like to see them get the &quot;glitches&quot; out of what they are already providing dealers before deciding to take on another venture and that they will have more problems with. Just my Opinion. Before I get to spend more money on my Internet Ventures I have to prove the other money being spent is working correctly and providing results, then if so I get more stuff. Makes sense to me!
R