Trade IPOs with Eva: Cars.com (CARS) considering sale

Wednesday, January 16, 2019

Cars.com (CARS) considering sale

The Chicago-based digital auto listings company said today that it's exploring a possible sale, and mulling various strategic options.
June 2018: Cars.com hired JPMorgan to explore its options regarding a possible sale of the company, the New York Post reported.

** charts after announcement **

Cars.com announces review of strategic alternatives in pursuit of enhancement of shareholder value

Digital auto marketplace Cars.com is exploring a sale in the wake of Starboard Value taking an ownership stake in the online car retailer.

The Chicago-based company said it has been exploring “strategic alternatives” since September. The company has not set a timetable and will not provide additional details until the board approves a specific course of action or determines further disclosure is appropriate or required by law.

Starboard Value bought an ownership stake in Cars.com in early 2018. Last month, Starboard asked the company to improve stock performance, sell itself or shake up its management ranks. The auto seller added Starboard representatives to its board and slashed 8 percent of its workforce.

Cars.com launched in 1998 by a group of newspapers, which included the previous owner of the Chicago Tribune.

"We have taken direct control of newspaper affiliate relationships while adapting the company's internal sales and technology operations to accelerate the business strategy, while substantially reducing legacy costs,” Cars.com CEO Alex Vetter said in a statement regarding the potential sale. “Throughout this strategic review process, we will continue to execute on our strategy and remain focused on providing exceptional value to our customers."

Cars.com acquired two digital startups in early 2018 – Dealer Inspire and Launch Digital Marketing, two Chicago-based companies that provide digital tools to automotive dealers. Cars.com said the acquisitions will allow it to offer more digital tools to auto dealers through its online marketplace.

"In light of multiple inquiries which indicate the possibility of realizing that future value now," Scott Forbes, Cars.com board chairman, said Wednesday along with the announcement. "And after careful consideration, we took the decision to explore strategic alternatives in late 2018, consistent with the board's commitment to acting in the best interests of the company and its stakeholders to enhance shareholder value."