CDK sale interesting topic

Someone sent me an email saying that it is impossible for Bob Brockman to buy CDK/ADP. In the email they explained that the DOJ would never allow that sale to go thru, because Reynolds and ADP would own like 80% of the dealership business.

I want to talk about that. I do not put a lot of faith in the DOJ on this. Here is my reasoning behind this. First of all the DOJ would have to determine if there are any competitors in the DMS space. Which we know there are a lot. (Dealertrack, Auto/Mate, Autosoft, etc... etc...) Probably like 10 to 15 DMS companies (roughly).

That allows competition, so that is the first thing DOJ looks at. Then the next question, is the competitors growing or shrinking? Well with Bob running Reynolds into the ground, all the dealers have left and went to any DMS who would take their business. So yes the competitors are growing and are continuing to grow. That makes the DMS seem less like a monopoly in the eyes of the DOJ.

I am not saying a merger is going to happen. I have no insight on this. The last blog post was a what if scenario. What I am saying is the possibility is there, and it would not be good for the automotive dealerships. Although combining UCS and Reynolds was not good for the automotive dealers either and it was still allow to proceed.

Like everything we will have to wait and see

Let me know your thoughts in the comments. You can stay anonymous.