LAKE SUCCESS, N.Y. — DealerTrack revealed Thursday its local teams will be relocating to new Dallas office space.

The company will be leasing approximately 59,152 square feet of new office space at Dallas’ Galleria 1 building, officials announced.

And this new office will house 240 members of DealerTrack’s vehicle inventory management team.

Bridget Townsend, vice president and general manager, will continue to lead the company’s inventory solution offerings; and Richard Marzan, vice president and general manager, will remain the lead for trade operations at the new location, the company explained.

“Bringing our entire inventory management team into a centralized Dallas location will benefit DealerTrack, the entire solution team, and ultimately, our customers, moving forward,” said Mark O’Neil, chairman and chief executive officer, DealerTrack. 

“The Galleria 1 building gives us the ideal space to meet our immediate needs and grow with our business,” he added.

The move is expected to be completed by the third quarter of this year.

Prior to the move, DealerTrack’s eCarList and AAX inventory management solution teams were in two separate Dallas locations, officials noted.

The eCarList brand was acquired by DealerTrack in July 2011, and AAX has been part of the DealerTrack family since 2009.

DealerTrack was represented in the transaction by Don Catalano, SIOR, CCIM, MCR, of Corporate Realty Consultants, a commercial tenant representation firm that represents top global clients. 

The landlord, FSP Galleria North Limited Partnership, was represented by Christopher Taylor of Cassidy-Turley.

The financial terms of the deal were not released.

DealerTrack Reveals Proposed Private Offering of $150 Million of Senior Convertible Notes

In other news from the company, it also announced that it intends to offer, subject to market and other conditions, a $150 million aggregate principal amount of senior convertible notes due 2017 in a private offering.

The notes will be offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended, officials noted.

The company also expects to grant the initial purchasers of the notes an option to purchase, within a 13 day period beginning on, and including, the date it first issues the notes, up to an additional $22.5 million aggregate principal amount of notes.

Officials explained that the notes will pay interest semi-annually and will mature on March 15, 2017, unless earlier repurchased or converted.

Also, prior to October 15, 2016, the notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time until the second scheduled trading day immediately preceding the maturity date.

“Upon conversion, holders will receive, at DealerTrack's discretion, cash, shares of DealerTrack's common stock or a combination thereof. DealerTrack will not have the right to redeem the notes prior to maturity,” the company explained.

Also, of particular interest to dealers, in connection with the offering of the notes, DealerTrack expects to enter into one or more privately negotiated convertible note hedge transactions with one or more dealers, which may include one or more of the initial purchasers of the notes or their respective affiliates.

“The convertible note hedge transactions are expected to cover, subject to customary anti-dilution adjustments, the number of shares of DealerTrack common stock that will initially underlie the notes,” officials noted.

Furthermore, DealerTrack also expects to enter into separate privately negotiated warrant transactions with the hedge counterparties.

The company also delved into how this will work.

“In connection with establishing their initial hedges of the convertible note hedge transactions and warrant transactions, the hedge counterparties and/or their affiliates expect to purchase DealerTrack common stock in open market transactions and/or privately negotiated transactions and/or enter into various cash-settled derivative transactions with respect to DealerTrack common stock concurrently with, or shortly after, the pricing of the notes,” officials explained.

“In addition, the hedge counterparties and/or their affiliates may modify their hedge positions by entering into or unwinding various derivative transactions with respect to DealerTrack common stock and/or by purchasing or selling DealerTrack common stock in open market transactions and/or privately negotiated transactions following the pricing of the Notes from time to time (and are likely to do so during any conversion period related to a conversion of notes,” they added.

Lastly, the company expects to use a portion of the net proceeds from the offering of the notes and the proceeds from the sale of the warrants to fund the cost of the convertible note hedge transactions.

The remaining net proceeds from the offering of the notes are expected to be used for working capital and general corporate purposes, which may include, among other things, repayment of existing indebtedness, acquisitions and investments, the company concluded.

DealerTrack Announced Pricing of Private Offering of $175 Million of 1.50 Percent Senior Convertible Notes

In some more financial news from DealerTrack, the company also announced the pricing of its private offering of $175 million aggregate principal amount of 1.50 percent senior convertible notes due 2017.

These are to be sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended.

DealerTrack has granted the initial purchasers of the notes an option to purchase, within a 13-day period beginning on, and including, the date it first issues the Notes, up to an additional $25 million aggregate principal amount of notes.

The offering is expected to close on March 5, subject to certain closing conditions, the company noted.

“The notes will be DealerTrack's senior unsecured obligations, subordinated in right of payment to existing and future secured senior indebtedness,” officials shared.

The notes will bear interest at a rate of 1.50 percent per year, payable semi-annually in cash on March 15 and Sept. 15 of each year, beginning on Sept. 15 of this year.

DealerTrack will not have the right to redeem the notes prior to maturity.

And the notes will mature on March 15, 2017, unless earlier repurchased or converted.

“In the event of a fundamental change prior to maturity, the holders of the notes will have the ability to require DealerTrack to repurchase all or any portion of their notes for cash at a repurchase price equal to 100 percent of the principal amount of the notes being repurchased plus any accrued and unpaid interest,” the company noted.

Prior to Oct. 15, 2016, the Notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time until the second scheduled trading day immediately preceding the maturity date.

Upon conversion, holders will receive, at DealerTrack's discretion, cash, shares of DealerTrack common stock or a combination thereof.

The initial conversion rate will be 26.7618 shares of DealerTrack common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $37.37 per share of DealerTrack common stock, which represents a conversion premium of approximately 33.50 percent to the closing sale price of $27.99 per share of DealerTrack common stock on the NASDAQ Global Select Market on February 28, the company explained.

Moreover, following certain corporate transactions that occur prior to the maturity date, DealerTrack will, in certain circumstances, increase the conversion rate for a holder that elects to convert its notes in connection with such a corporate transaction.

In connection with the offering of the notes, DealerTrack has entered into one or more privately negotiated convertible note hedge transactions with one or more dealers, which may include one or more of the initial purchasers of the notes or their respective affiliates.

The convertible note hedge transactions will cover, subject to customary anti-dilution adjustments, the number of shares of DealerTrack common stock that will initially underlie the notes.

DealerTrack has also entered into separate privately negotiated warrant transactions with the hedge counterparties, the company added.

In conclusion, DealerTrack estimates that the net proceeds from the offering of the notes will be approximately $169.1 million (or approximately $193.3 million if the initial purchasers exercise their option to purchase additional notes in full), after deducting the initial purchasers' fees and estimated offering expenses.

Furthermore, the company expects to receive proceeds from the sale of the warrants described above.

“DealerTrack expects to use a portion of the net proceeds from the offering of the Notes and the proceeds from the sale of the warrants to fund the cost of the convertible note hedge transactions,” officials stated.

“DealerTrack expects to use the remaining net proceeds from the offering of the Notes for working capital and general corporate purposes, which may include, among other things, repayment of existing indebtedness, acquisitions and investments,” they concluded.