J.D. Power to Buy TrueCar's ALG

Automotive industry research specialist J.D. Power is to acquire US and Canada automotive residual value projections specialist ALG from auto pricing and information web site TrueCar, for $135m. The buy is expected to expand the offerings of J.D. Power's data and analytics division.

In car leasing terms, residual value refers to the resale value of a car at the end of a lease agreement. J.D. Power says residual values are the foundation of leasing and are used across multiple segments of the automotive industry. A number of variables affect the residual value of a vehicle over a multi-year lease term - such as mileage, quality/reliability, options and feature sets, weather and the macroeconomic environment - and these need to be taken into account in order to forecast residual values.

The deal includes an upfront cash payment of $112.5m at closing and total deferred payments of up to $22.5m based on financial results, with the transaction expected to close by the end of 2020. TrueCar President and CEO Mike Darrow says after considering a variety of options and potential partners, it became clear that a sale of ALG to J.D. Power, with its breadth of complementary services, strong automotive industry expertise and trusted reputation, represented the best path forward for ALG's clients.

Dave Habiger (pictured), President and CEO of J.D. Power, adds: 'We believe ALG will bring complementary strengths and value to J.D. Power and its clients. For more than 50 years, ALG has been a trusted data provider to the automotive industry delivering accurate and reliable residual value forecasts. Adding that component to our extensive data assets, valuation expertise and analytic tools will enable us to provide even more value to our clients'.

Web sites: www.jdpower.com and www.truecar.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.