By Keith Regan E-Commerce Times
04/11/01 10:58 AM PT
In purchasing its competitor, Autobytel is focusing on taking over Autoweb's
Automotive Information Center (AIC) division, which provides information and
technology support to the automotive industry.
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Autobytel (Nasdaq: ABTL)
announced Wednesday that it would acquire its struggling competitor
Autoweb.com (Nasdaq: AWEB)
in a stock deal worth about US$15 million.
The combined company will keep the Autobytel name.
According to the companies, the combined venture
will have annual revenues of approximately $100 million and
will bring together 7,000 car dealers and an average total of 2
million monthly Web visitors.
The deal is a lifeline for Autoweb, which
moved into the dot-com critical list last month, when it
was served with a delisting notice
from the Nasdaq exchange.
Crash Course
Santa Clara, California-based Autoweb had been known
to be searching for a buyer to save it from bankruptcy.
"During the last several months, we have made substantial
progress in cost-cutting and efficiency initiatives to accelerate
our profitability goal," said Jeffrey Schwartz, Autoweb's chief executive officer.
In November, Autoweb laid off 25 percent of its workforce
in the face of slowing sales. Then in March, it restructured
a slew of partnerships, a move Autoweb said would save $40 million a year.
Eyes on AIC
Irvine, California-based Autobytel, meanwhile, is
focusing on Autoweb's Automotive Information Center (AIC) division,
which will continue to provide information and technology
support to the automotive industry.
"Merging the AIC capabilities with those of Autobytel
will add a key element to our future business strategy,"
said Autobytel president and chief executive officer Mark Lorimer.
Four to Go
Consolidation continues to drive
the online car sales world.
Autobytel started the consolidation trend in October
1999, when it bought Carsmart.com for $31 million.
It has since linked with General Motors (NYSE: GM) and
is currently operating a test drive
of the automaker's own multi-dealer e-commerce
venture in the Washington, D.C. area.
The latest merger combines two of the largest online
car firms. In addition to Autobytel, there are three
other major players in the market:
AutoNation, which has a partnership
in place with America Online, MSN's Carpoint, and
Amazon partner CarsDirect.com.
Small Premium
The deal will pay stockholders of Autoweb
53 cents for each share they hold, a premium
on Tuesday's closing price of 29 cents but a far cry
from the $50 level reached shortly after Autoweb went public in March 1999.
Autobytel shares have fared only slightly better.
Far below the $58 hit on the day of its IPO, the
stock closed at $1.50 on Tuesday.
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