PR & News Reynolds & Reynolds Acquires Gubagoo

[Ryan Everson]

Last week CDK acquired Roadster.

Today, Reynolds & Reynolds announced that they have acquired Gubagoo.

Who's next?


Here's the press release I just received from them:


It’s an exciting day here at Gubagoo!

Today, we announced that Gubagoo has been acquired by our friends at Reynolds & Reynolds.

This partnership will provide Gubagoo with unprecedented capabilities built upon Reynolds’ decades of excellence in dealership software and operations.

It will also add additional strength behind developing and supporting the features that drive value for dealers, as we continue to innovate our award-winning products.

Gubagoo will continue to run as an independent brand, retaining the culture of unparalleled support and responsive innovation that you’ve come to love.

All customers, no matter your DMS, will continue to be served with our highest level of care. The only significant change that you will notice will be our pace of innovation continuing to increase.

Know that we’re here for you – and with additional resources, we are ready to serve you better than ever. We are on a mission to help your dealership win the future, and we are deeply committed to pursue this calling.

If you have any questions about this news, feel comfortable reaching out to us at any time.

As always, we’re happy to help. Thank you for your continued support.


Warmly,
Brad Title, CEO

 

[Rob]

Well, shit.

 

[Rob]

The only significant change that you will notice will be our pace of innovation continuing to increase.

LOL

 

[Alex Snyder]

Next comes Darwin. And that number should be

Would love to know what Gubagoo sold for. Anyone have an idea?

 

[Alex Snyder]

Totally missed that Prodigy was purchased in March. The grapevine says it was for $100 million with roughly 150 dealerships

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[Rob]

Totally missed that Prodigy was purchased in March. The grapevine says it was for $100 million with roughly 150 dealerships

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I missed that too. Really makes you think the Gubagoo number was too much to say no to.

 

[Alex Snyder]

I missed that too. Really makes you think the Gubagoo number was too much to say no to.

Just heard from the grapevine it was north of $600 million.

 

[Ryan Everson]

Just heard from the grapevine it was north of $600 million.

That's insane.

To put it in perspective, DealerInspire "only" sold for $165 million and had a digital retailing platform, chat platform, website platform, and advertising platform. Whereas Gubagoo only has DR and chat. Obviously, a lot more at play and things are much different 3 years later.

 

[Alex Snyder]

That's insane.

To put it in perspective, DealerInspire "only" sold for $165 million and had a digital retailing platform, chat platform, website platform, and advertising platform. Whereas Gubagoo only has DR and chat. Obviously, a lot more at play and things are much different 3 years later.

The whole Gubagoo going to ReyRey thing is insane! When I heard that number I did a double take too, but then a few things started to make sense.

Gbgoo has around 6,300 clients on either chat or DR or a combination. They are probably averaging over $1,000 a month per client. That explains a 10x valuation on revenue.

ReyRey and CDK must be feeling pressure from Tekion. They need to have a product suite to compete. This is justification for a 10x multiplier if margins don't justify it.

 

[Chris Cachor]

That's insane.

To put it in perspective, DealerInspire "only" sold for $165 million and had a digital retailing platform, chat platform, website platform, and advertising platform. Whereas Gubagoo only has DR and chat. Obviously, a lot more at play and things are much different 3 years later.

I remember at the time the $165M number was wild because DI was making maybe $5M/y. But the overall strategy helped $CARS.