Investment firm Warburg Pincus Monday took the Cobalt Group Inc., an
e-business products provider that specializes in helping automotive dealers
manage their practices online, private.
largest shareholder with a 46 percent
stake, Warburg Pincus will tuck Seattle-based Cobalt in for a price of $3.50
per share. The purchase price represents approximately a 79 percent premium
to the $1.95 closing share price on June 1.
Shares held by Warburg Pincus will not be converted in the merger, and
certain other shareholders, including directors and senior management of
Cobalt, also may retain an equity interest in Cobalt after completion of the
Cobalt recently entered into the merger agreement after receiving the
unanimous recommendation of a special committee of independent directors
that had been established to evaluate and negotiate the transaction on
behalf of Cobalt’s board of directors. SG Cowen Securities Corp. advised the
Warburg Pincus and John W.P. Holt, Cobalt’s president and chief executive
officer, who collectively own 49 percent of Cobalt’s outstanding common
stock, have entered into a voting agreement pursuant to which they have
agreed to vote to approve the proposed merger at a future scheduled
shareholders’ meeting. Shareholder approval will be solicited by means of a
proxy statement, which will be mailed to shareholders after it is reviewed
by the Securities and Exchange Commission.
Cobalt expects to hold the shareholders meeting to vote on the proposed
merger in September 2001 and to complete the transaction shortly after that
Cobalt, whose offerings include Web site hosting, e-commerce applications
and customer relationship management (CRM) applications among other things,
made headlines last week when it announced a new CRM product for the
Created in conjunction with software firm Acxiom Corp. and auto industry
consumer analysis provider LogicLinc, AutoMarket In.Sight is a suite of
software and services designed to help auto dealers and manufacturers
improve customer retention and increase sales and service. Claiming the
release would push the envelope in CRM, the Cobalt Group said it will
develop the application interface and maintain the dealer applications
through its MotorPlace.com portal.
Cobalt Group has some clout in the automotive industry, too. In January, the
Cobalt Group became the first e-business provider endorsed by the National
Automobile Dealers Association (NADA) when it agreed to offer its products
to auto dealers across the United States. NADA represents more than 40,000
auto franchises in the U.S. alone.