J.D. Power has closed its purchase of ALG, a deal first announced in August.
The company said in a news release Nov. 30 that acquisition of the TrueCar subsidary "will dramatically broaden its vision of automotive residual value forecasting, especially important as the industry prepares to launch a wave of new electric vehicle (EV) models and pushes toward increased vehicle automation and other emerging technologies."
In a separate release, TrueCar said the $135 million consideration in the deal includes $112.5 million received at closing and up to $22.5 million in total deferred payments based on certain financial results.
TrueCar said it plans to use the proceeds of the ALG sale to support up to $75 million in share repurchases, a program that it has already started. The proceeds will also be used to "maintain strategic flexibility," TrueCar said.
In the news release from TrueCar, President and CEO Mike Darrow said, "We are very pleased to reach today’s milestone, which reinforces our commitment to creating shareholder value. With over $270 million of cash on the balance sheet and no outstanding debt, we are in a strong financial position to accelerate toward our vision of building the most flexible and convenient digital car-buying marketplace."
Meantime, J.D. Power will integrate ALG into its data and analytics division. ALG is widely known for its expertise in residual value forecasting, something that will be crucial as new technologies, like EVs, gain a greater foothold in automotive.
"As the automotive industry continues to face several technological, environmental and economic factors, the significance of what ALG brings to J.D. Power data and analytics capabilities...