November 5, 2014 — UPDATED WITH NEW REVENUE INFORMATION — Dealership website chat service firm Contact at Once! has been acquired by LivePerson Inc. (NASDAQ: LPSN) for approximately $65 million.
Contact at Once! provides text and chat services for dealership websites in the automotive retail space. It acquired the chat solution of OutSell earlier this year. It claims approximately 13,000 dealerships, manufacturers and automotive shopping sites are using its services. The company, which was founded 10 years ago, also has started making inroads into the real estate market.
The chat space in automotive retail has been growing sharply the last few years with 41% of all franchise dealerships incorporating it on their websites this year and another 10% expected to add it in 2015. Look for automakers to also begin adding chat capabilities on their websites within the next year.
Contact at Once!, the market share leader in a space that has approximately 20 different vendors, posted annual revenue in 2013 of nearly $18 million, up from $12.3 million in 2012 and $6.4 million in 2011. Meanwhile,ActivEngage, the second largest provider, has grown from $2 million in 2010 to $8.2 million in 2013.
Contact at Once’s management team led by CEO John Hanger and Executive Vice President of Strategy Marc Hayes will continue with the company, which has approximately 120 employees.
According to the terms of the deal, LivePerson, leading provider of digital solutions including chat software, will pay $43 million in cash and $22 million in stocks with another $5 million if certain objectives are met.
The deal is the latest in a record-setting year for acquisitions and IPOs from vendors in the automotive retail space.
- Ally Financial led the way with a $12.04 billion IPO
- Brookfield Property Partners acquired Capital Automotive for $4.283 billion
- Cars.com acquired by Gannett Co. in a deal valued at $2.5 billion
- TPG acquired the Warranty Group for $1.5 billion
- KKR acquired Internet Brands (CarsDirect) for $1.1 billion
- DealerTrack acquired Dealer.com for $987 million
- TrueCar’s IPO was valued at about $880 million
- ADP spun off its $1.9 billion Dealer Services Group.
Several other smaller deals, including the Contact at Once! acquisition, also occurred in 2014 ranging from $2 million to $300 million. It’s likely the deals aren’t done yet as there are rumors of at least two or three that are on the table by the end of the year.