The deal is subject to regulatory approval by the Foreign Investment Review Board, which could take up to six months. The price is undisclosed.
The sale follows an approach to DealerCell by Cox Automotive Australia which is seeking to realign the focus of its business Down Under since it sold the CarsGuide and Autotrader websites to eBay earlier this year.
The founder and CEO of DealerCell, Mark Lancaster said in a statement: “We were delighted but not surprised when Cox Automotive approached us to acquire the business.
“As a family-owned business Cox Automotive is a great fit for us and we look forward to playing an important role in growing their retail software solutions set.”
DealerCell’s main business model revolves around its online sales enablement platform for an auto finance approvals system for dealers. The loan approvals platform has been revolutionising the finance sales process in dealerships.
Dealers who subscribe to DealerCell are able to find out what car buyers can afford by getting instant online finance approvals early in the sales process.
The company will soon be offering the service online to the public so prospective buyers can get loan approvals and know what payments they can afford before they start shopping for a car.
Using the DealerCell process in the showrooms, dealers are currently able to achieve finance penetrations rates of more than 60 per cent.
Contrasting this, in a recent interview with GoAutoNews Premium, Mr Lancaster, said: “If the customer gets into the dealership and buys a car the traditional way, and they go through a business manager in the traditional way towards the end of the sales process, then the finance penetration is 35 per cent. It is, and has been for some time, consistently 35 per cent. It never changes.”
Cox said of the purchase that it is now focusing “on executing its broader strategy of building upon strengths in the wholesale arena and supporting dealers, OEMs, insurers, financiers, fleet/lease and rental companies with a connected retail proposition which is becoming even more important in light of COVID-19.
Rob Whiten, CEO of Cox Automotive Australia said: “For many years Cox Automotive has focused on digitizing the wholesale and retail automotive experience, to provide our customers the tools they need to keep their businesses moving forward in rapidly changing markets.
“The acquisition of DealerCell will allow us to expand and connect our digital offerings across all of our brands in order to offer solutions across the automotive ecosystem.”
By John Mellor