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Disposal of Specialty Finance Leads Product
12 Months Ended
Dec. 31, 2016
Restructuring and Related Activities [Abstract]  
Disposal of Specialty Finance Leads Product

On December 19, 2016, Autobytel and Car.com entered into an Asset Purchase and Sale Agreement, by and among Autobytel, Car.com, and Internet Brands, in which Internet Brands acquired substantially all of the assets of the automotive specialty finance leads group of Car.com (“Acquired Group”). The transaction was completed effective as of December 31, 2016. The transaction consideration consisted of $3.2 million in cash paid at closing and $1.6 million to be paid over a five year period pursuant to a Transitional License and Linking Agreement (“License Agreement”). The Company recorded a gain on sale of approximately $2.2 million in connection with the transaction in 2016.

 

In connection with the transaction, Internet Brands, Car.com and Autobytel entered into an agreement pursuant to which Car.com and Autobytel will provide to Internet Brands certain transition services and arrangements. Pursuant to the License Agreement, (i) Internet Brands will pay Autobytel $1.6 million in fees over the five-year term of the License Agreement, and (ii) Car.com will (1) grant Internet Brands a limited, non-exclusive, non-transferable license to use the Car.com logo and name solely for sales and marketing purposes in Internet Brand’s automotive specialty finance leads business; and (2) provide certain redirect linking of consumer traffic from the Acquired Group’s current specialty finance leads application forms to a landing page designated by Internet Brands.

 

The disposal of the automotive specialty finance leads product did not qualify for presentation and disclosure as a discontinued operation because it did not represent a strategic shift that had or will have a major effect on the Company’s operations. The pretax profit of the finance leads product for 2016, 2015 and 2014 was $0.3 million, $0.4 million and $0.7 million, respectively.