The owners of this business have redirected their attention to other ventures leaving this business on autopilot. Without the attention needed to maintain sales and margins, revenues have declined. Accordingly, the business is priced attractively to sell at around a 2x multiple. The owners are seeking a cash buyer able to complete a purchase transaction on an aggressive timeline of around 10-14 days. This presents an opportunity for a new owner to acquire a business which is a compilation of over 10 years of lead generation experience with proprietary processes in place along with many valuable intangibles at a great price that just needs attention and marketing efforts to turn around and grow. This business is an ideal acquisition target for buyers already in the lead gen or automotive spaces.
Canadians and Americans wore out the showroom floors of car dealerships in 2016, driving automakers to record sales for the year in both markets. Interestingly, before hitting the showroom, most car buyers hit the keyboard first. In North America, the average car shopper now spends 11 hours online researching their next purchase. The shopping is not just for the right car, buyers are also online looking for money to help with the purchase. While statics vary from year to year, according to Experian Automotive, an industry research and data firm, about 78 to 82% of car buying is financed in some fashion, whether by car loans or leases.
This type of market data leads car dealers large and small to the inevitable conclusion that buyers make much of their purchasing decision online before they ever set foot on the lot. Finding buyers online is key to customer acquisition and continued sales growth. Accordingly, the online advertising spend in the automotive industry is ballooning. The new trends and habits of current car buyers mean an online customer acquisition strategy is now an integral part of the success or failure of car dealerships. And while selling cars may be their strength, online advertising is often not, leading many dealers to seek help online finding new leads.
Each year the auto market is getting more competitive forcing dealers to continually look for new avenues to grow their businesses. Buying auto leads has become the norm for both independents and dealer groups and it continues to grow throughout Canada as dealers grow the financing side of their business.
The founders of this business have over 10 years’ experience in the lead generation industry covering many verticals, industries and customer buying models. Leveraging that experience, members of the group began focusing on the fast growing online automotive sales industry building models, data, experience and ultimately a set of powerful lead generation capabilities directly related to the automotive financing niche. Having combined and honed their processes, this business has become a leader in the automotive lead generation space in Canada.
The basis of the business is the generation and sale of auto loan related leads to car dealerships across Canada. The business operates three primary processes to generate its revenue: a set of online advertising campaigns and processes to attract leads, a proprietary lead capture, validation and processing system that automates much of the collection and sale of the leads to dealers in their network and an online advertising strategy focused on developing new dealer relationships and growing the customer base paying for leads generated by the system.
This company is a compilation of over 10 years of lead generation experience and 3 years of work to customize that experience into an auto loan lead generating machine. The proprietary processes and online assets along with many valuable intangibles make the business an excellent opportunity for buyers already in the lead gen or automotive spaces as well as those seeking a mature and established business that can be run part-time and remotely. This company has quickly established a customer base and industry leading reputation in the Canadian market space. Building on this technology platform, customer base and revenue stream, the new owner could branch into new geographies (U.S. or the E.U), utilize other advertising platforms to collect leads (PPC, other social networks) as well as monetizing the growing client database with third parties in related industries (automotive accessories, vehicle warranties, etc.). From adding more lead generation avenues, to utilizing the untapped database to adding in third party offers, the company has an excellent runway for future growth and profitability.
Price & Financial Summary
Listing Price $300,000 CAD
TTM Gross Revenue $1,489,634 CAD
TTM Cash Flow $143,079 CAD
Listing Price $246,000 USD
TTM Gross Revenue $1,221,500 USD
TTM Cash Flow $117,325 USD
This company has developed a significant and profitable revenue flow in its first two years of operation. It operates in a huge billion dollar industry so while some level of competition and flux is inevitable, this well-established business is in a great position to continue its strong growth. Sales projections for 2017 exceed 2016 results. The company has invested in the development and testing of new lead acquisition technology and competition has increased the cost of advertising putting a little pressure on the profit projections for 2017. That said, the industry size and increase in new car sales make the possibilities for growth abundant for this business.
This business has differentiated itself versus competitors in a number of key areas including: supplying a quality product at a reasonable price, creating a high level of trust and transparency not seen in the industry, selling leads exclusively to its customers thereby increasing the value of the lead and running unique marketing campaigns as most of the competition run similar campaigns to each other with little change or creativity over time.