CDK Global Inc.'s planned acquisition of Auto/Mate, a smaller provider of dealership management systems, has been blocked by the Federal Trade Commission, the companies said Tuesday.
The move would have bolstered CDK's positioning in the market serving smaller dealership groups, and removed a smaller rival whose business model was predicated on scooping customers from CDK and the other DMS giant, Reynolds and Reynolds, in part through lower prices and less restrictive data-access policies.
CDK and Auto/Mate signed an agreement last April outlining terms of a sale that was subject to FTC approval, Auto/Mate said. But after an 11-month review, Auto/Mate said in a statement, "the FTC decided that it was in the best interest of auto dealers to have Auto/Mate remain as a strong competitor in the marketplace."
Auto/Mate said the FTC dug into documents from CDK and Auto/Mate and spoke to a variety of industry players, including dealers, competing companies, consultants and CDK employees, as well as Auto/Mate CEO Mike Esposito and Larry Colson, the Albany, N.Y., company's managing partner.
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