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Subsequent Events
6 Months Ended
Jun. 30, 2011
Subsequent Events  
Subsequent Events
18. Subsequent Events

On July 1, 2011, DealerTrack AAX acquired substantially all of the assets of eCarlist, LLC (eCarlist) for an initial purchase price of $35.3 million, subject to working capital and other customary adjustments, consisting of a cash payment of $23.5 million (which constitutes initial cash consideration of $23.7 million minus an initial working capital estimate adjustment) and an $11.6 million unsecured subordinated note. The note was issued by DealerTrack Holdings, Inc. and has a term of either two years or six years, based on certain factors related to the retention of key individuals, which we expect will result in compensation expense of approximately $1.5 million to be recorded in our consolidated statement of operations over two years from the date of acquisition. The sellers may earn additional consideration of up to $10.0 million, consisting of up to $5.0 million payable in each of 2012 and 2013 based upon the achievement of certain revenue targets in 2011 and 2012, respectively. Additionally, we expect to make payments to certain former employees of eCarlist related to continued employment that will result in compensation expense of approximately $2.2 million to be recorded in our consolidated statement of operations over two years from the date of acquisition.

eCarlist provides a suite of inventory management and online marketing tools for the retail automotive industry, enabling dealers to appraise, price, and merchandise vehicle inventory online in real-time. eCarlist's solutions and services will be a part of the DealerTrack inventory management solutions group, which now includes inventory management, inventory distribution, vehicle appraisal and pricing tools, mobile software, dealership health reporting, CRM, custom web design, and digital marketing solutions via an integrated Software as a Service (SaaS) platform. We expect this acquisition will significantly expand our subscription business and further strengthen our relationship with automobile dealers.

We expensed approximately $0.6 million of professional fees associated with the acquisition in the three and six months ended June 30, 2011. We expect to expense an additional approximately $0.6 million of professional fees in the third quarter of 2011. We are in the process of finalizing the fair value assessment for the acquired assets and liabilities, which is expected to be completed during the third quarter of 2011.