>
Warburg Pincus, ABS Capital Partners and Oak Investment Partners Lead Equity Investment; Silicon Valley Bank Provides New Credit Facility
SEATTLE (June 9, 2004) — The Cobalt Group, the leading provider of customer relationship management and e-business software and services to the automotive retail market, today announced that the company has secured $54 million in a new round of financing. The financing includes $47 million in Series B equity funding from Warburg Pincus, the global private equity firm, and new investors, ABS Capital Partners and Oak Investment Partners, also private equity firms. Additionally, Cobalt has increased its credit facility with Silicon Valley Bank by an additional $7 million. Cobalt will use the funding for acquisitions and new product development. In conjunction with the financing, Tim Weglicki, a General Partner of ABS Capital Partners, will join Cobalt's Board of Directors.
"Cobalt is pleased to have earned the confidence of investors such as Warburg Pincus, ABS Capital, Oak Investment Partners and Silicon Valley Bank, who share our vision of expanding our line of products and services to meet the needs of the automotive industry in the future," said John Holt, The Cobalt Group's President and CEO. "We are excited to add Tim Weglicki to our board and value the breadth of expertise our new investors will bring to our business as we continue our growth. We look forward to continuing to strengthen our product portfolio, both through internal development and strategic acquisitions."
Mr. Holt added: "These funds will ensure that we can accelerate the development and distribution of our industry-leading suite of customer relationship management applications, while continuing to maintain the high level of customer care that our thousands of dealer customers appreciate and have come to expect from us."
Cobalt partners with automobile dealers and manufacturers to develop customer relationship management (CRM) software and e-business products and services that increase profits and enhance the consumer car-buying and ownership experience. Cobalt serves a dealer community larger than any other technology provider in the automotive retail industry, including 12,000 franchised dealers and more than 70 of the 100 largest dealer groups. With its recently announced endorsement by General Motors, the company has created technology solutions for and been endorsed by 27 automobile manufacturers, the majority of which are exclusive agreements.
Joseph P. Landy, Co-President of Warburg Pincus and a member of the Cobalt board since 1998, said: "Cobalt has established itself as an important technology partner for some of the most well-known brands and dealers of all sizes in the largest consumer industry in the world. With the additional capital announced today, Cobalt is positioned to grow as the industry looks to adopt new technology and services to increase both customer satisfaction and profits."
An investor since October 1998, Warburg Pincus invested an additional $34.5 million in November 2001 to take the company private. With Warburg Pincus' support, Cobalt has significantly expanded its capabilities and customer base and has become the only software technology provider endorsed by the National Automobile Dealers Association (NADA).
Tim Weglicki, General Partner of ABS Capital Partners, said: "The CRM business will be one of the most important things that dealerships will focus their efforts on in the next five years. This expanding line of business along with Cobalt's growth in providing enterprise software for manufacturers and dealers as well as other business initiatives will help cement Cobalt's future success. We are extremely pleased to join with management and the investor group to propel further growth of the company. Cobalt exceeds our criteria for investing in growth companies with substantial recurring revenues, solid customer bases, and highly differentiated products and services in their focus industries."
Cobalt's dealer products and services include online retailing website applications that help manufacturers and dealers reach, engage and close sales with online vehicle shoppers. Cobalt's CRM suite of products enables dealers to more effectively manage the process of converting Internet, voice and walk-in leads into showroom traffic, resulting in increased sales and customer satisfaction. Automotive websites have become a critical strategy for dealerships and manufacturers as 64% of new car buyers use the Internet in the purchase process, based on estimates from J.D. Power and Associates. Although 70%, or approximately 15,000 U.S. dealerships, currently use manual or paper-based sales processes, 53% of these, nearly 8,000 dealerships, expect to adopt a technology-based solution to drive sales efficiencies and increase dealership revenue in the foreseeable future, according to a study by Herbert Research, Inc.
redric Harman, General Partner of Oak Investment Partners, said: "Cobalt is uniquely positioned to help its customers maximize their overall operating efficiencies and long-term return on investment in new technologies such as CRM software applications, online automotive commerce applications and OEM parts locating and marketing. We have deep conviction that the Cobalt team will continue to build long-term value for its shareholders."
Matt Thoreson, Senior Vice President, Silicon Valley Bank, said: "We take pride in our continued relationships with leading technology companies like Cobalt. Our mission is to help emerging and established technology companies succeed by providing the diversified financial services that will help them grow and prosper. We've partnered with Cobalt since 1997, and are pleased to provide them with $22 million in credit facilities, including this new $7 million financing."
Headquartered in Seattle, Washington, Cobalt has offices in several major North American cities including Austin, Texas; Columbus, Ohio; Detroit, Michigan and in Bangalore, India. The company also has field sales and services forces in 30 U.S. states and all major metropolitan sales areas.
About Warburg Pincus-Warburg Pincus has been a leading private equity investor since 1971. The firm currently has approximately $14 billion under management, including $4 billion available for investment in a range of sectors including information and communication technology, business services, energy, financial services and technologies, healthcare and life sciences, media and real estate. Warburg Pincus has invested approximately $4.8 billion in 140 technology companies, including BEA Systems (Nasdaq: BEAS), VERITAS Software (Nasdaq: VRTS), Avaya (NYSE: AV) and Manugistics Group (Nasdaq: MANU). An experienced partner to entrepreneurs seeking to create and build durable companies with sustainable value, the firm has offices in North America, Europe and Asia and an active portfolio of about 125 companies. For more information, please visit www.warburgpincus.com .
About ABS Capital Partners-ABS Capital Partners is a private equity firm that was founded in 1990 to invest in mid- to later-stage growth companies in order to create significant, market-leading companies. The firm's investment strategy focuses on companies in the healthcare, technology, business services and media and communications sectors. Its investment professionals partner with strong management teams to help build businesses with substantial revenues, near-term profitability and solid customer bases. The firm has created long-term value for management and investors. ABS Capital Partners leverages over 100 years of combined investing and operating experience among its partners and provides a range of investment structures, including expansion financings, management buyouts and recapitalizations. With an extensive history and knowledge of equity and mergers and acquisitions markets, ABS Capital Partners provides strategic guidance and helps companies to capitalize on their business opportunities. ABS Capital Partners has $1.5 billion under management and eight investing partners within offices in Baltimore, San Francisco and Boston. Over the past twelve years, ABS Capital Partners has backed industry leaders including AMISYS Managed Care Systems Corporation (now McKesson Corporation), American Radio Systems Corp, Corporate Express, Inc. (a Buhrmann company), DoubleClick, Inc., Omnicell, Inc., OTG Software, Inc. (now Legato Systems, Inc.), @Road, Inc. and Transition Systems, Inc. (now Eclipsys Corp.) Additional information can be found at: www.abscapital.com .
About Oak Investment Partners Oak Investment Partners is a multi-stage venture capital firm with a total of $4.2 billion in committed capital. Investments are primarily focused on growth opportunities in enterprise application and infrastructure software, telecommunications equipment and services, data storage, financial services technology, outsourced services, healthcare services and retail. Over a 25-year history, Oak has achieved a strong track record as a stage-independent investor funding more than 350 companies at various points in their lifecycle. Oak has been involved in the formation of companies, provided growth equity to mid- and late-stage businesses, as well as spinouts of operating divisions and technology assets. A representative list of Oak portfolio companies includes Aquantive, Compaq, Inktomi, InterNAP, Parametric, Pivotal, Polycom, Primus, Seagate, Sybase, Synopsys, Tensilica, Wellfleet, and Wireless Facilities. For more information, please visit www.oakvc.com .
About Silicon Valley Bank Silicon Valley Bank provides diversified financial services to emerging growth and mature companies in the technology, life sciences and private equity markets, as well as the premium wine industry. Through its focus on specialized markets and extensive knowledge of the people and business issues driving them, Silicon Valley Bank provides a level of service and partnership that measurably impacts its clients' success. Founded in 1983 and headquartered in Santa Clara, Calif., the company serves more than 9,500 clients across the country through 26 regional offices. More information on the company can be found at www.svb.com .
Media Contacts:
The Cobalt Group Mike Martinez 206-898-3941
Warburg Pincus Kenny Juarez or Jennifer Jenkins of The Abernathy MacGregor Group 212-371-5999
ABS Capital Partners Stephanie Manuel 410-246-5609
Oak Investment Partners Grace Ames 203-226-8346
Silicon Valley Bank Eileen McElroy 415-512-4271
Contact Information
Cobalt Corporate Communications
Email: press@cobaltgroup.com
Phone: (206)219-8022
