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From left, Esposito, Pietrzak and Colson at NADA show in Las Vegas.

DealerSocket, Auto/Mate Seal Deal; Now for Integration Part

In a Wards Q&A, three executives talk about working together to combine their software companies that serve auto dealers.

LAS VEGAS – After a bump in the road, automotive software provider DealerSocket completed its acquisition of Auto/Mate, which specializes in dealer management systems.

The combined companies will give dealers “a long-awaited and much-needed alternative for an integrated, connected platform of mission-critical software for dealerships,” says DealerSocket CEO and President Sejal Pietrzak.

The collective now supports more than 9,000 dealerships and more than 300,000 active users across its products.

The proposed acquisition was announced last month, but two DealerSocket founders, Brad Perry and Jonathan Ord, legally objected as board members. Vista Equity owns DealerSocket. The dispute centered on valuation.

The matter was resolved. In a recent statement, Perry says, “After years in the making, it is terrific to finally see the combination of these two companies that are so focused on the needs of the dealer.”

Now comes the part of putting two operations together.

Talking about that in a Wards Q&A at the National Automobile Dealers Assn. convention and expo here are Pietrzak, Auto/Mate Chairman Larry Colson and Auto/Mate CEO and President Mike Esposito. Here’s an edited version.    

Wards: What should we know about the acquisition?

Pietrzak: We are so excited about this marriage of two companies. We’re calling ourselves the power couple. It gives us the opportunity to have full solutions across our companies, which are incredibly complementary from an acquisition standpoint.

Dealers we’ve talked to have given us great feedback. There are dealers with DealerSocket who are joining Auto/Mate and vice versa.

Wards: We’re you expecting positive dealer feedback?

Pietrzak: Absolutely.

Wards: So you weren’t thinking someone might say, “Wow, that’s a horrible idea” or something like that.

Colson: It makes sense. And things that make sense in this market are well-received. Most people have been very positive about it.

Wards: What makes sense about it?

DealerSocket + AutoMate (002).pngColson: There’s not a lot of overlap between the companies and we have very similar cultures. We can make a compelling case as to why dealers should choose both. They’ll have options. We’ve always been open about our DMS having partners. We want to make it so dealers really want to choose our products.

Our goal is to make the products work well together so you avoid the finger pointing between multiple vendors. You avoid the double entries. We want to solve a lot of problems of these critical tools for dealers.

Wards: How hard will the integration be? A lot of companies think they’ve figured it out before they get together, only to find out otherwise. Do you expect any imponderables along those lines?

Pietrzak: The best part is the cultures of our employees. As we become one team, it’s all about collaboration and learning from each other. When team members are excited about it, everything else becomes easier.

Esposito: In acquisitions, some companies come in with a playbook and say, “This is how we are going to do it.” And from day one, they can run into problems. That’s not the case here. DealerSocket has been cerebral in how we do this. They understand the way we run the business and that we love what we do. They said, “Just keep doing more of what you’re doing.” As we move along, we’ll make adjustments. It will be more evolution, not revolution. We want to come out with some quick hits so people can see how they can be with Auto/Mate and DealerSocket both.

Pietrzak: The quick wins are what we’re excited about.

Colson: Sejal’s message to Mike and me has been that we’ve had incredible growth, great retention rates and happy customers. So do no harm. Do business as usual. We want to figure out how the companies (can best work together). We’ll go nice and slow but we’ll also aggressively go after technical interfaces.

Wards: And what about overlap?

Colson: There are bits of overlap, but you see that almost anywhere. Our parts really fit together well. We have a CRM product, they have one, but they don’t really compete in the market. They don’t have a franchised dealer DMS, they have an independent dealer DMS. So things come together almost perfectly.

Wards: Are Mike and Larry staying with the company?

Pietrzak: Yes.

Wards: DealerSocket is in Irving TX. Auto/Mate is in Albany, NY. Will it stay there?

Pietrzak: Yes. In fact, we’re looking to grow the Albany office as well.

Wards: How’d this idea come about?          

Pietrzak: The DealerSocket vision for a long time has been to offer full platforms. It started as a CRM company nearly 19 years ago (acquiring various companies along the way). The plan has always been that a franchised-dealer DMS would be a nice piece to fill our product offerings.

Wards: Do you anticipate major changes in how you do business?

Pietrzak: What we’ll see is a lot more investment in the businesses. We made a significant investment in buying Auto/Mate. We intend to invest more in people, dealer support and technology.

Wards: How do you intend to market this thing? That you have a full package?

Pietrzak: That we have the full package, and we’re investing in it. We’re focused on what we are going to launch in the market. As Mike said, we’ll have some quick wins.

Wards: What will those be?

Colson: They will be technological. I’m not sure we’re ready to talk about those. We want to make a big splash when we do it. You’ll see integration in the products to make it easier for dealers if they are using both of ours. We want to make a compelling case.

Pietrzak: It’s been our vision for a long time to have an all-in-one platform, where customers can go to one source for their needs. In a survey we did, that was one of the things dealers said they wanted most.

Wards: Will it be one technological platform or are you speaking metaphorically?

Colson: It’s metaphorical, but it’s a platform play where you can provide all the tools. Look at it as an eco-system of products.

TAGS: Dealers
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