No IPO for AutoTrader in the offing: president

DETROIT Wed Sep 11, 2013 3:53pm EDT

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DETROIT (Reuters) - AutoTrader has no plans at the moment to consider a public listing, its president said on Wednesday, eight months after the online automobile marketplace operator pulled the plug on an initial public offering.

The company, which owns the AutoTrader.com and Kelley Blue Book brands, pulled its $300 million IPO in January, citing market conditions. Privately held Cox Enterprises, which owns 75 percent of AutoTrader, as well as all of wholesale car auction company Manheim, prefers to nurture both auto assets itself, said Sandy Schwartz, president of both units.

"I can tell you that we have no plans right now to take either of the companies public, but certainly not more specifically the AutoTrader Group," he said in a telephone interview. "It's not my decision, but I will tell you that as president of these two companies that's probably off our radar screen right now."

AutoTrader and Manheim make up about a quarter of Cox's $16 billion in annual revenue, and that auto-related portion rises to one-third if auto ad sales in Cox's media assets are included, said Schwartz, who has led Manheim since 2011 but was named head of AutoTrader in March. Manheim and AutoTrader employs 20,000 and 3,500 people, respectively.

Schwartz said there are no plans to combine Manheim and AutoTrader, which generates revenue mainly through subscriptions for new and used car listings and advertising.

Instead, Schwartz said his marching orders from Cox Chief Executive Jimmy Hayes were to better leverage the various assets and to examine possible add-ons to the companies' existing services that might benefit shoppers and dealers.

"Data is king and the data we have on cars from the minute it comes off the assembly line, we are not leveraging it as well as we should," Schwartz said.

Areas where AutoTrader may look include taking the well-known Kelley Blue Book brand overseas, building a vehicle identification number repository, or buying in to more companies as it did last November when it acquired a 21.8 percent stake in China's Bitauto (BITA.N) auto online website, he said.

Schwartz said Kelley Blue Book is a strong brand and AutoTrader is exploring how it can leverage the name in such markets as China, India and Brazil, possibly partnering with Bitauto in the world's largest auto market.

About two months ago, Cox bought back a stake of almost 5 percent in AutoTrader from private equity firm Kleiner Perkins Caufield Byers, and another private equity firm, Providence Equity Partners, still owns a 25 percent stake.

"When the time comes for them to get their money out, there's two ways," Schwartz said of Providence Equity Partners. "We either write them a really big check or we take the company public and they take 25 percent of that. I don't think they seem to be in too big of a hurry to get out."

AutoTrader's sales, now about $1.2 billion annually, are growing at a double-digit rate, Schwartz said. The Manheim business, with about $3 billion in annual sales, is growing more modestly, at less than 5 percent.

(Editing by Matthew Lewis)

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