Benzinga | Nov 4, 2021 07:20AM EDT

Cars.com Reports Pu rchase Of CreditIQ Auto Fintech Platform For $30M In Cash At Closing, Potential For Up To Added $50M In Performance-Based Cash Consideration Over Next 3 Years

Transaction Highlights:

- Advances CARS' growth strategy and expands TAM into the multi-billion dollar Auto Finance segment, which is rapidly growing as online car buying transactions accelerate

- Builds additional revenue streams and strengthens attribution for CARS while expanding end-to-end transaction platform capabilities

- Increases dealers' financing profit while enhancing operational efficiencies

- Will drive immediate incremental revenue and gross profit as we roll out across the network

CHICAGO, Nov. 4, 2021 /PRNewswire/ -- Cars.com Inc. (NYSE:CARS) ("CARS" or the "Company"), a leading automotive marketplace platform that provides a robust set of industry-specific digital solutions, announces it has signed a definitive agreement to acquire CreditIQ, a cutting edge automotive fintech platform that provides instant online loan screening and approvals to facilitate online car buying. Consideration for the transaction will be $30 million at closing, funded using cash on hand, with the potential for up to an additional $50 million in performance-based cash consideration to be earned over the next three years. The transaction is expected to close this month.



"The acquisition of CreditIQ technology facilitates CARS' entry into the rapidly-growing, multi-billion dollar Auto Finance market, expanding our TAM beyond the $35 billion Auto Advertising and Dealer Technology markets we operate in today. We're excited to participate in this space with powerful digital solutions for dealers that facilitate online financing and enable them to better compete," said Alex Vetter, President and Chief Executive Officer of CARS. "The acquisition of this scalable technology supports our vision of creating frictionless omni-channel experiences and further growing our platform capabilities for buyers and sellers, building on our competitive advantage and delivering additional value to our shareholders."

Dealers gain access to CreditIQ's advanced digital financing technology, which facilitates the completion of the finance process online across the CARS platform via Dealer Inspire's ("DI") 5,200 websites, its digital retailing platform "Online Shopper," and the Cars.com marketplace. Dealers benefit from improved efficiency, increased profits Per Vehicle Retail (PVR), greater lead conversion, and deeper attribution data and insights. In addition, the technology offers automated lender decisions from dealers' preferred lender networks, a differentiator in the market specific to the CreditIQ offering.

The tens of millions of high-intent, in-market car shoppers who visit the CARS platform each quarter -- 142MM visits at Cars.com and an additional 247MM visits across DI dealer websites -- will take advantage of the new interactive online loan screening and approval marketplace, providing instant finance offers and enabling a complete buying transaction from the comfort of their home. In addition, lenders will get access to a large audience of in-market auto shoppers. The technology is expected to be integrated across the CARS platform in the first quarter of 2022. CARS will monetize the platform upon rollout, generating revenue directly from lenders on a per-transaction basis.

CreditIQ has also built a Lending-as-a-Service (LaaS) framework that enables dealers, marketplaces, OEMs and automotive software providers to use the same advanced fintech capabilities.

Founded in 2014 by automotive and lending software experts Bill Liatsis, Anthony Liatsis, and Bill Gerhard, CreditIQ is headquartered in New York and develops digital retail financing technology designed to facilitate online car sales and streamline in-store processes for auto dealers. Said Bill Liatsis, CEO of CreditIQ, "CreditIQ's technology was created to help dealers be more efficient and profitable. We are excited to join forces with a company who shares our dealer-centric approach, helping local retailers better compete by the use of better technology. Integrating with the CARS connected platform allows us to continue to equip a much broader audience of consumers, dealers and lenders to be successful in the growing digital financing sector."