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Auto Trader ownership stake changes hands

Bloomberg News

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Cox Enterprises Inc., the Atlanta-based media holding company, agreed to buy back a 25 percent stake in AutoTrader Group from Providence Equity Partners, restoring its full ownership of the e-commerce business.

Cox and Providence didn’t disclose the financial terms, though a person with knowledge of the deal said the stake was worth about $1.8 billion. That would put AutoTrader’s total value at about $7 billion. Cox will now own 98 percent of the business, with the rest held by current and former employees.

Providence, a private-equity firm, had acquired the stake in 2010 to help boost growth at the online auto-marketing business, which runs the websites AutoTrader.com and KBB.com. Providence also received a $100 million dividend from AutoTrader in 2012, giving the Rhode Island-based firm a threefold return on its $640 million investment.

Since Providence took its stake in AutoTrader, the business has acquired related services such as Kelley Blue Book, Haystak Digital Marketing and HomeNet Automotive, helping it reach 62 percent of people who are in the market to buy a car, according to Cox.


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