Recently, Cars.com hired JPMorgan to begin exploring the options for a possible sale of the business, which was first reported by the New York Post.
Three months ago, Cars.com added two nominees to their board of directors from investor Starboard Capital. It seems that these two additions were only brought on for the potential sale.
The Chicago-based Cars.com, experienced a rise in its stock price by over 8% shortly after the New York Post reported that the internet-based car retailer was up for sale.
A source disclosed that the sale will most likely go for around $40 a share. Currently Cars.com is selling for around $32 a share.
Apax Partners, a worldwide private equity firm, and Cox Communications are both rumored as possible buyers. Also tossing their hat into the ring is media company Hearst Communications who recently stated they might be interested if Cars.com went up for sale.
In their last quarter, Cars.com finished with revenue of $160 million, up by $6.8 million. In their first quarter report, they predicted another revenue increase of 10-11% for the remainder of the year.
Some of this recent growth might also stem from recent acquisitions of two startups. In February, Cars.com purchased Launch Digital Marketing and Dealer Inspire. Cars.com said these purchases would enable them to offer more digital tools to car dealers.
In their first quarter report, Cars.com cited that revenue growth has primarily been due to these new purchases, which has added $5.7 million of retail revenue.
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