TrueCar to Go Private in $227 Million Buyout Led by Founder
Scott Painter to Return as CEO
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TrueCar Inc. agreed to be taken private in an all-cash deal valued at about $227 million, shaking up the online vehicle marketplace at a volatile time for the automotive industry.
The company will be acquired by Fair Holdings, a firm led by TrueCar founder Scott Painter, in a deal expected to close in the fourth quarter or early next year, according to a statement Oct. 15. The $2.55-a-share purchase price represents a 72% premium over the closing price Oct. 14.
Painter, who started TrueCar in 2005 and took the company public, will return as CEO after the transaction closes. He stepped down as CEO in 2015 after dealers withdrew from the website over concerns they were being squeezed on pricing. He has sinceÌýstarted other ventures, including Autonomy, a startup offering electric vehicle subscriptions.
The buyout comes at a moment of stress for the auto industry, a key pillar of the U.S. economy that has been racked by tariff-driven cost increases, strategic missteps and stress in the borrowing market. Subprime auto lender Tricolor Holdings declared bankruptcy last month amid allegations of fraud.
TrueCar shares jumped 68% to $2.48 at 9:31 a.m. Wednesday in New York. The stock tumbled 60% this year through Oct. 14.
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