CDK Global Inc. sales management system giant plans to buy Salty Dot Inc., a company that allows consumers to digitally purchase vehicle insurance at the same time as they purchase a vehicle, the companies said Thursday.
The terms of the agreement were not disclosed. COO Global CDK Joe Tautges said Automotive news that Salt is considered a “fast-growing company, in the early stages” and that the purchase price falls below the thresholds of public disclosure. The deal is expected to close in October and will not affect the company’s financial guidance for fiscal year 2022, he said.
CDK, of Hoffman Estates, Ill., Said the addition of Salty, founded in 2019 by CEO James Hall, to its product line would provide software tools that go beyond helping merchants in the digital operation of stores. tire. The company said vehicle insurance could become a new revenue stream for vehicle dealers and give them more opportunities to connect with their customers after they have purchased a vehicle.
“Traders are the natural point of importance as consumers seek to buy insurance,” Tautges said. “Wherever you are, you have to think about how to secure this vehicle? And Salt, from our point of view, has the best, most advanced, mobile platform.”
Tautges said CDK in recent years has analyzed what consumers want from a vehicle transaction and the values of simplicity, convenience and a frictionless experience that emerged were among the reasons the company bought the digital retail provider Roadster in June and its management system. Elead customer relations in 2018. With
Improving the purchasing process
The acquisition of Salty, based in Salt Lake City, seeks to improve the customer buying experience in similar ways, he said.
“Consumers have historically had to leave the journey to buy the car, go and enter a process of selling insurance and return to [the vehicle purchase] and verify that they have provided coverage, “Hall said.
Salty’s Embedded Insurance tool works with retailers to allow consumers to receive a vehicle insurance quote from participating carriers before completing their vehicle purchase, Hall said. Once a customer has agreed on the purchase price, payment and trading value and the deal is moved to the finance and insurance office they can receive a text message from Salty’s digital platform giving their quote, he said.
“How do we solve the fact that most people do not like to buy insurance because it is stressful, it is complicated, it is confusing for most people, and yet, everyone needs it?” Tha Hall.
“We were trying to create a solution for it using technology, and this solution for us is Embedded Insurance – insurance where technology drives the best insurance a consumer can find in a market for their risk class, all on top of the fingers of their mobile device, without having to spend much time [or] talk to an agent. “
Salt works with just over 500 franchised dealers, Hall said. In July, the company said is partnering with Asbury Automotive Group Inc. to incorporate Salty security technology within Asbury Clicklane’s digital retail platform.
Hall said Salty is a licensed insurance provider in all 50 states and works with about 12 to 18 insurance carriers, including national and regional providers. The platform can work with merchants regardless of their sales management system, digital retailer or other software providers. Tautges said Salty software will maintain that access once the purchase is complete.
The roots of an agreement
The acquisition took place about six months ago when Hall contacted CDK for Salty’s integration into CDK Fortellis’ open network development platform, Tautges said. This led to deeper discussions about how companies could instead work together through a acquisition, he said.
When the acquisition is complete, Hall will join CDK as head of the company at Embedded Insurance, Tautges said.
CDK in March completed the sale of its international business to private equity firm Francisco Partners, in a $ 1.45 billion transaction. CDK at the time said it intends to use the proceeds from the sale to invest in its operations in North America, which include DMS and other sales software tools in the US and Canada.
“We enjoy a very strong balance sheet, from our perspective, of being able to make purchases,” Tautges said, adding that CDK will continue to evaluate deals that aim, among other things, to improve the customer experience that a trade can offer.
The CDK in August issued revenue guidance of $ 1.78 billion to $ 1.82 billion for its fiscal year 2022.
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