Item 1.01 Entry Into a Material Definitive Agreement.
Dealertrack Data Services, Inc. ("Seller"), a wholly-owned subsidiary of
Dealertrack Technologies, Inc. ("Dealertrack"), entered into the First Purchase
Agreement (the "First Transaction") and the Second Purchase Agreement (the
"Second Transaction", and together with the First Transaction, the
"Transactions") to sell all of its 15,601,761 shares of common stock of TrueCar,
Inc. ("TrueCar"). The aggregate consideration received by Seller in the
Transactions was approximately $92.5 million in cash. The TrueCar common stock
was carried on Dealertrack's consolidated balance sheet as a cost method
investment in the amount of $82.7 million.
Dealertrack intends to use a portion of the net after-tax proceeds from the
Transactions as part of the purchase consideration for its previously announced
acquisition of Dealer Dot Com, Inc. and, accordingly, expects to reduce the
amount of the proposed Term Loan B debt financing in connection therewith from
$625 million to $575 million.
On February 7, 2014, Seller, Peppy Capital 2.5, LP, a Delaware limited
partnership ("Peppy"), and the investors set forth in such document (Peppy and
such investors collectively, the "First Purchasers"), entered into a Stock
Purchase Agreement (the "First Purchase Agreement"). The First Purchase
Agreement provides for the purchase by the First Purchasers of 14,681,761 shares
of the common stock of TrueCar, from the Seller for approximately $87.0 million
On February 12, 2014, Seller and Trenton Investments, LLC ("the "Second
Purchaser" and, together with the First Purchasers, the "Purchasers"), entered
into a Stock Purchase Agreement (the "Second Purchase Agreement" and, together
with the First Purchase Agreement, the "Purchase Agreements"). The Second
Purchase Agreement provides for the purchase by the Second Purchaser of 920,000
shares of the common stock of TrueCar from the Seller for approximately $5.4
million in cash.
The Purchase Agreements contain customary representations, warranties and
covenants by the Seller and respective Purchasers. The foregoing summaries of
the Purchase Agreements do not purport to be complete and are qualified in their
entirety by reference to the full text of the Purchase Agreements, which are
included as Exhibit 2.1 and Exhibit 2.2 to this Current Report on Form 8-K and
are incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On February 11, 2014, the Seller completed the First Transaction and on February
13, 2014 Seller completed the Second Transaction. The assets involved were
15,601,761 shares of common stock of TrueCar (the "Shares"), and the completion
of the Transactions resulted in the sale by the Seller of the Shares to the
Purchasers pursuant to the Purchase Agreements. The Purchasers are listed (and
their respective identities are disclosed) on the signature pages to the
Purchase Agreements. As a result of the completion of the Transactions, the
Seller no longer owns any shares of common stock of TrueCar. The aggregate
consideration received by the Seller in the Transactions was approximately $92.5
million in cash. The Transactions are more fully described in Item 1.01 above,
and such description is incorporated herein by reference. The Purchase
Agreements are included as Exhibit 2.1 and Exhibit 2.2 to this Current Report on
Form 8-K and are incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
2.1. FIRST STOCK PURCHASE AGREEMENT
2.2. second stock purchase agreement