Vroom , an innovative ecommerce platform that offers a better way to buy and sell used vehicles, announced that it has entered into a definitive agreement to acquire United Auto Credit Corporation (UACC), a proven leader in automotive finance with 25 years of automotive lending experience, for $300 million in cash, subject to adjustment based upon UACC’s closing book value.
This transformational acquisition accelerates Vroom’s strategic objective to establish captive financing capabilities to support sales growth, improve unit economics and create long-term value for Vroom’s shareholders. With the integration of UACC’s non-prime lending capabilities, even more consumers will have the opportunity to seamlessly transact on Vroom’s platform as they look to purchase their next vehicle without ever leaving home.
UACC will join Vroom’s existing lineup of world-class lenders available through its ecommerce platform while both teams work to integrate UACC’s services and develop Vroom’s captive financing operation. UACC also will remain committed to maintaining and expanding its impressive network of over 7,300 dealership customers. Jim Vagim, President and Chief Executive Officer of UACC, and Ravi Gandhi, Managing Director and CFO of UACC, will remain in their positions following the acquisition and play a key role in the integration and execution of Vroom’s captive finance strategy.
“Competitive financing is a fundamental component of Vroom’s value proposition and adding proprietary lending capabilities unlocks significant value for our business and our customers,” said Paul Hennessy, Chief Executive Officer at Vroom. “We were impressed with the UACC team’s depth of expertise, as well as their commitment to their customers, and are thrilled to have them as part of the team as we advance our lending offering and continue our asset-light approach to scaling our business. The transaction represents a meaningful strategic opportunity, with significant potential for enhancing aggregate gross profit and improving customer satisfaction.”
“We have always been focused on providing as many consumers as possible the chance at vehicle ownership through our deep lending capabilities and market expertise,” said Jim Vagim, President and Chief Executive Officer of UACC. “We’re excited to continue this mission by becoming part of the Vroom team and working together to facilitate transactions for even more consumers.”
Following the acquisition, UACC will become an indirect wholly-owned subsidiary of Vroom and will continue to operate under the UACC name. Vroom will finance the purchase price through cash on hand. Following the closing, the acquisition is expected to immediately be accretive to Vroom’s earnings. The transaction is expected to close either late in the fourth quarter of 2021 or early in the first quarter of 2022, subject to receipt of required regulatory approvals and satisfaction of customary closing conditions.