Dealership software giant CDK Global Inc. has struck a deal to acquire ELEAD1ONE, a provider of customer relationship management, service and marketing solutions, according to two people familiar with the negotiations.
While ELEAD1ONE maintains a vast portfolio of dealership products, one of the sources said the company’s CRM platform, in particular, will be “highly complimentary” to CDK’s business as it looks to fortify its position as a conduit of end-to-end automotive commerce.
CDK, pending approval from the Federal Trade Commission, will acquire 100 percent of ELEAD1ONE. The deal has been in the works for around a year, the source said, and is expected to be announced Monday.
“When you look at what has made ELEAD1ONE so unique, it’s essentially a fully integrated platform that combines CRM with sales and service and marketing and a contact center that’s all integrated into a single dashboard,” the source said. “CRM has clearly evolved in automotive.”
A CDK spokesman couldn’t be reached for comment.
An ELEAD1ONE source familiar with the negotiations said it wasn’t the first time a company has made a pitch to acquire the software provider. But the company felt CDK was the ideal partner this time around.
“The integrations, the resources they’ll bring to the table as far as people resources, technology resources, Everything we’ll share in common from our account base, made it the right time.”
CDK, based in Hoffman Estates, Ill., has been planting a major stake in the digitized future of car sales. Websites built on CDK’s platform, which draw around 14 million monthly visitors, are becoming digital commerce hubs. Through CDK’s Connected Store platform that was developed in-house, consumers can get accurate price quotes and structure deals before going to dealerships, thus streamlining the purchase process on dealer sites.
CDK also owns a significant chunk of the dealership management system market with rival Reynolds and Reynolds.
CDK is no stranger to acquisitions. CDK Service, a tool acquired from Superior Integrated Solutions around six years ago, enables service advisers to complete walkaround inspections with a tablet and makes passing a customer to another adviser seamless.
But not all of the company’s recent deals have been approved. In March, CDK terminated a planned acquisition of DMS provider Auto/Mate after FTC opposition.
CDK and Auto/Mate signed an agreement in April 2017 outlining terms of a sale, subject to FTC approval. But after an 11-month review, Auto/Mate said “the FTC decided that it was in the best interest of auto dealers to have Auto/Mate remain as a strong competitor in the marketplace.”
ELEAD1ONE, headquartered in North Valdosta, Ga., made headlines in Feb. 2017 after an employee concocted a hoax that spooked DMS companies.
The employee circulated what appeared to be a ransom email from hackers, which said they had breached the company’s CRM system and were going to release Reynolds, CDK and Dealertrack data from three to four dealership groups. In reality, no breaches had occurred.