PROVIDENCE – Private equity firm Providence Equity Partners is acquiring a 25 percent stake in AutoTrader.com, the Internet’s largest auto shopping and advertising site. The financial terms were not disclosed.
Separately, Providence-based ProvEquity has agreed to buy radiological services provider Virtual Radiologic Corp. for $294 million. The private equity firm will pay $17.25 a share, more than 30 percent more than the stock price before the deal was announced.
Publicly traded Virtual Radiologic, which helps doctors interpret X-rays, will be taken private by ProvEquity when the transaction is finalized.
The AutoTrader.com deal was announced earlier this month by Atlanta-based Cox Enterprises Inc., the parent of AutoTrader.com and also the parent of Cox Communications Inc.
Cox said the agreement will provide the company with investment capital and expertise to help the website grow. ProvEquity, with $22 billion under management, specializes in media, communications and information services companies.
Cox will maintain majority ownership and operating control of AutoTrader.com, but ProvEquity will take over two seats on AutoTrader.com’s board.
“This agreement demonstrates our commitment to AutoTrader.com’s continued success and will speed its future growth as the leader in the online auto space,” said Jimmy Hayes, Cox Enterprises president and CEO. “Providence Equity has a strong track record of working with communications, media and Internet companies to promote growth and encourage strategic expansion.”
