Cars.com has officially begun the sales process.
The move comes after Cars.com hired JPMorgan last month to explore its options regarding a possible sale of the company, a story that the New York Post first reported.
Three months ago, Cars.com added two nominees to its board from activist investor Starboard Capital. It is unlikely these additions were for any purpose but a sale, a source told the Post
Cars.com (NYSE: CARS), based in Chicago, made a morning jump up more than 8 percent after The New York Post reported the online car retailer was officially on the sales block.
A source told the Post last month that a sale looks likely at around $40 a share. Cars.com was trading around $32 Wednesday morning.
International private equity firm Apax Partners and Atlanta-based TV company Cox Communications are both being discussed as potential bidders for Cars.com. Mass media conglomerate Hearst Communications told DealReporter that it may also be interested in Cars.com if it were for sale.
Cars.com closed last quarter with a total revenue of $160 million, up $6.8 million. In its Q1 report, the company predicted revenue growth of 10 percent to 11 percent for the rest of the year.
The company also reported that it reaches an average of 19.4 million unique visitors through its website each month, an increase of 9 percent year-to-year.
Their growth over the past year is apparent, as the retailer recently acquired two digital startups. In February, Cars.com bought both Dealer Inspire and Launch Digital Marketing, two Chicago-based companies that provide digital tools to automotive dealers. Cars.com said the acquisitions would allow it to offer more digital tools to auto dealers through its online marketplace.
According to the Q1 report, Cars.com cites that the revenue growth was driven by these two acquisitions, which combined contributed $5.7 million to retail revenue.
