Business
Online Automotive Retailer Vroom Successfully Completes Acquisition of United Auto Credit Corporation
Transformational Acquisition marks the first step in the development of Vroom's captive finance arm NEW YORK--(BUSINESS WIRE)-- Vroom (NASDAQ: VRM), an
About this update from Vroom, Inc.
[{"type":"text","content":"\nTransformational Acquisition marks the first step in the development of Vroom's captive finance arm\n\n NEW YORK--(BUSINESS WIRE)--\nVroom (NASDAQ: VRM), an innovative ecommerce platform that offers a better way to buy and sell used vehicles, today announced the successful completion of its acquisition of United Auto Credit Corporation (UACC), a proven leader in automotive finance. The acquisition accelerates Vroom’s strategy of establishing a captive finance arm to support sales growth, improve unit economics and create long-term value for Vroom’s shareholders.\n\nThe deal also welcomes over 500 UACC employees including Jim Vagim, Co-President and Chief Executive Officer, who will continue to operate and expand UACC’s third party finance business, which currently features an impressive network of over 8,000 dealership partners, and Ravi Gandhi, Co-President and Chief Financial Officer, who will play a leading role in developing Vroom’s captive finance arm. The integration of UACC’s non-prime lending capabilities will enable even more consumers to seamlessly transact on Vroom’s platform as they look to purchase their next vehicle without ever leaving home.\n\n“Building out a captive finance business that allows us to service customers across the credit spectrum is an integral part of our commitment to providing an end-to-end ecommerce solution to our customers and creates significant potential for both enhancing aggregate gross profit and improving customer satisfaction,” said Paul Hennessy, Chief Executive Officer at Vroom. “By integrating an automotive lender like UACC, with rich expertise in the non-prime space, Vroom will be able to serve a broader portion of the customer base. We believe this will translate to greater efficiency on our marketing efforts and allow us to scale the business faster.”\n\nWith a 25-year history in the non-prime auto finance market, UACC brings to Vroom a disciplined credit culture with a continuous improvement mindset, along with a strong reputation and AAA ratings in the securitization markets.\n\nWith the acquisition, UACC becomes an indirect wholly-owned subsidiary of Vroom and continues to operate under the UACC name. Vroom financed the purchase price through cash on hand and it is expected to immediately be accretive to Vroom’s earnings.\n\nAdvisors\n\nWells Fargo Securities, LLC served as...