CAMBRIDGE, Mass. -

In a deal that would expand the company into wholesale, CarGurus has agreed to purchase a majority stake in CarOffer, an automated instant vehicle trade platform.

CarGurus, which would acquire 51% interest in this deal, has the ability to also purchase CarOffer’s remaining equity interest over the next three years.

The deal is valued at $275 million

The purchase would give CarGurus the ability to offer dealers additional wholesale capabilities, leading to a digital solution by which dealers can sell and acquire retail and wholesale vehicles, the company said.

CarGurus said expanding into wholesale is a key piece of its overall platform strategy.

“CarOffer is disrupting the traditional wholesale auction model in the same way that CarGurus gained our position as the leading online consumer automotive marketplace in the U.S., by leveraging technology, data and analytics to build more transparent solutions,” CarGurus chief financial officer Jason Trevisan said in a news release.

“The combination of CarGurus’ industry-leading dealer network and our Instant Market Value retail pricing, and CarOffer’s instant trade technology and logistics capabilities, creates a powerful selling platform,” he said. “We believe we will be the most valuable partner to help dealers sell more cars at retail and now also sell and acquire cars in the wholesale channel.”

Pending regulatory and closing conditions, the companies expect the deal to close in January. After closing, CarOffer will continue operating independently, with its existing leadership, under its existing brand and at its headquarters in Plano, Texas.

Longtime auto entrepreneur Bruce Thompson is chief executive officer and founder of CarOffer. In the release, he said: “I’ve long admired the team at CarGurus for the innovation they have driven in the automotive retail sector, and the large consumer audience and dealer base they have built.

 “CarOffer gives dealers an entirely new way to win more trades, acquire more used inventory and ultimately sell more cars,” Thompson said. “We’ve seen rapid adoption of the platform since our launch, and with CarGurus’ investment and dealer reach, we can accelerate that pace and volume to reach even more dealers. The synergies we will create with CarGurus’ market data and pricing engine will enable us to provide tools and sourcing capabilities dealers desperately need.”