Kelley Blue Book Co., the venerable publisher of car-buying guides, is looking for a buyer, according to a report in the Financial Times.
Within the past few weeks, the family-owned automotive information provider has retained JP Morgan (JPM) to handle the sale process, the Financial Times reported, attributing the information to unnamed bankers claiming knowledge of the situation.
One of the bankers placed the value of Kelley Blue Book at between $500 million and $1 billion, the Financial Times said.
Kelley Blue Book got its start in 1926, when a Los Angeles car dealer, Les Kelley, published the first Blue Book of Motor Car Values based on data he had been gathering since 1918, according to the company's website, kbb.com.
Kelley used the phrase "blue book" after the Social Register, a directory of the names and addresses of prominent American families, because valuable information could be found inside.
Harder to Compete with the Web
With the advent of the Internet, Kelley and fellow veteran car-buying guide Edmunds have faced increasing competition from whole host of new sources, including automakers themselves, which now operate elaborate websites that offer consumers up-to-date information on pricing, incentives, inventory and other data.
Among Kelley's competitors, AutoTrader.com is said to be a lead bidder for the Irvine, Calif.-based company, one of the bankers told the Financial Times. Private-equity firm KKR is viewed as another possible suitor, as are online auction site eBay (EBAY) and search-engine giant Google (GOOG). Also mentioned as a possible bidder was vehicle-information supplier Jumpstart Automotive, which is owned by the giant French media conglomerate Lagardère.
In 2000, Les Kelley's grandson Bob and great-grandson Mike retired from the company, according to its website. No Kelleys currently serve on the company's executive management team, the Financial Times reported.
Reasons for the sale are believed to be related to the hike in the capital gains tax rate to 20% from 15% that will take effect next year, as well as decreased traffic to the kbb.com website, the Financial Times reported. Statistics from Quantcast.com show monthly traffic at kbb.com fell to 7 million hits in July 2010 from 9 million hits in July 2007.