Local business information platform Yelp plans to acquire auto services platform RepairPal for about $80 million in cash.
The acquisition is expected to close by the end of the year, subject to customary closing conditions, Yelp said in a Thursday (Nov. 7) press release.
The company announced the planned acquisition in an earnings release that also said that Yelp’s advertising revenues in its Services categories rose 11% year over year to reach a record $228 million in third quarter. This contributed to the company’s net revenue rising 4% to a record $360 million.
“As we continue to build on our progress in Home Services, we believe RepairPal will accelerate our broader Services efforts by expanding our offerings in the multi-billion-dollar U.S. auto services advertising vertical,” Yelp Co-founder and CEO Jeremy Stoppelman said in the release.
The company said in a Thursday letter to shareholders that the acquisition will add RepairPal’s deep knowledge of auto repairs and pricing and its partner network to Yelp’s large consumer audience and its expertise in search engine optimization, search engine marketing and artificial intelligence.
This will bolster Yelp’s efforts in the Services categories, including the auto services advertising vertical from which the company derived $90 million of annualized revenue in the third quarter, according to the letter.
The strong performance of Yelp’s Services category came at a time when its Restaurants, Retail and Other categories “faced ongoing headwinds,” Yelp Chief Financial Officer David Schwarzbach said in the Thursday press release.
“Our planned acquisition aligns with our capital allocation strategy and demonstrates our ability to deploy balance sheet capital to support our business strategy,” Schwarzbach said.
RepairPal’s online platform and mobile app assist drivers in selecting certified auto repair shops and dealerships within their vicinity, PYMNTS reported in February.
The platform provides estimates for common repairs tailored to location and vehicle make/model, helping customers to avoid overpriced service costs.
IT and digital support infrastructure have been increasing in the auto repair market in North America, which is a market in which over 70% of the businesses are single-owner shops, Jeff Haynie, chief technology officer at auto repair shop management platform Shopmonkey, told PYMNTS CEO Karen Webster in an interview posted in December 2022.
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