Online Auto Retailer Vroom Successfully Completes Acquisition of United Auto Credit Corporation
Transformational acquisition marks first step in development of Vroom’s captive finance arm
NEW YORK, February 01, 2022–(BUSINESS WIRE)–vroom (NASDAQ: VRM), an innovative e-commerce platform that provides a better way to buy and sell used vehicles, today announced the successful completion of its acquisition of United Auto Credit Corporation (UACC), a recognized leader in automotive financing. The acquisition accelerates Vroom’s strategy of establishing a captive financial arm to support sales growth, improve unit economics and create long-term value for Vroom’s shareholders.
The agreement also welcomes more than 500 UACC employees, including Jim Vagim, Co-President and Chief Executive Officer, who will continue to operate and expand UACC’s third-party financing business, which currently has an impressive network of over 8,000 dealer partners, and Ravi Gandhi, Co-Chairman and Chief Financial Officer, who will play a leading role in developing Vroom’s captive finance arm. The integration of UACC’s non-preferential lending capabilities will allow even more consumers to transact seamlessly on Vroom’s platform when looking to purchase their next vehicle without ever leaving home.
“Building a captive finance business that allows us to serve customers across the credit spectrum is integral to our commitment to providing an end-to-end e-commerce solution to our customers and creates significant potential both to improve overall gross profit and improve customer satisfaction,” said Paul Hennessy, President and CEO of Vroom. “By integrating an auto lender like UACC, with a wealth of expertise in the non- preferred, Vroom will be able to serve a larger portion of the customer base. We believe this will result in greater effectiveness of our marketing efforts and allow us to scale the business faster.”
With a 25-year history in the non-priority auto finance market, UACC brings to Vroom a disciplined lending culture with a continuous improvement mindset, as well as a solid reputation and AAA ratings in the automotive markets. securitization.
With the acquisition, UACC becomes an indirect wholly-owned subsidiary of Vroom and continues to operate under the UACC name. Vroom financed the purchase price with cash and it is expected to be immediately accretive to Vroom’s earnings.
Wells Fargo Securities, LLC served as exclusive financial advisor and Simpson Thacher & Bartlett LLP served as legal advisor to Vroom. Raymond James & Associates, Inc. served as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP served as legal advisor to UACC.
About Vroom, Inc.:
Vroom is an innovative end-to-end e-commerce platform designed to provide a better way to buy and a better way to sell used vehicles. The company’s scalable, data-driven technology brings all phases of the vehicle buying and selling process to consumers wherever they are and offers a wide selection of vehicles, transparent pricing, competitive financing and a pick-up and home delivery. Vroom has offices in New York, Houston and Detroit and also operates the Texas Direct Auto brand. For more information, visit vroom.com.
About United Auto Credit Corporation:
UACC is a leading national technology unpreferred automotive lender serving the independent dealership market. UACC has made significant investments in the development of proprietary technology that has allowed it to adapt to an ever-changing market, scale efficiently and generate operational leverage. UACC has a top-notch management team committed to providing excellent service and creating value for its employees, customers and dealer partners. UACC is based in Newport Beach, Calif., Ft. Worth, TX and Buffalo, NY. For more information, visit unitedautocredit.net.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this press release that do not relate to historical facts should be considered forward-looking statements, including, without limitation, statements regarding our expectations regarding future operating results and the impact of the acquisition of UACC. These statements are based on management’s current assumptions and are not promises or guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements are materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. For factors that could cause actual results to differ materially from the forward-looking statements contained in this press release, please see the risks and uncertainties identified under “Risk Factors” in our Form 10-K for the fiscal year. ended December 31, 2020 and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, which is available on our Investor Relations website at ir.vroom.com and on the United States Securities and Exchange Commission website at sec.gov. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances.
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