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Digital car sales marketplace ACV Auctions explores takeover
Buffalo, N.Y.-based company is working with financial advisers to conduct the review, Bloomberg says
(ACV Auctions)
Key Takeaways:
- ACV Auctions is exploring strategic options including a potential sale or partnership after receiving takeover interest, people familiar with the matter said.
- The review comes as ACV faces a 47% one-year stock decline despite reporting a 10% year-over-year revenue increase in the second quarter.
- Any transaction remains weeks away and ACV could stay independent, while the company declined to comment on the review.
ACV Auctions Inc., a digital marketplace to buy and sell cars, is exploring strategic options including a potential sale after receiving takeover interest, according to people familiar with the matter.
The Buffalo, N.Y.-based company is working with financial advisers to conduct the review, the people said. It’s also weighing a strategic partnership as an alternative to a sale, the people said, asking not to be identified because the information is private.
Any deal is still weeks away and the company could opt to remain independent, the people added.
Shares of ACV, which have dropped 47% in the past year, fell 2.7% to $7.26 in New York trading Aug. 10, giving the company a market value of about $1.2 billion. The stock fell in late trading Aug. 10 after ACV released second-quarter earnings showing a year-over-year revenue increase of 10%.
The company’s shares rose as much 13% to $8.20 on Aug. 11 before falling back to $6.93, or down 4.5% as of 10:55 a.m. from the previous day's close in New York.
A representative for ACV declined to comment.
ACV helps dealerships with wholesale auctions of used cars. Its services include financing and transportation and more than 1 million vehicle inspections a year, according to its website.
ACV’s move comes as other players in the auto space are also heading to market. CCC Intelligent Solutions Holdings Inc., which makes software for the car insurance industry to help process auto claims and repairs, is exploring a sale amid pressure from activist investor Elliott Investment Management, Bloomberg News reported last month.
