CarMax (KMX 0.44%), the nation's largest retailer of used vehicles, had a big Thursday when it announced its fourth-quarter fiscal 2021 and an agreement to acquire all of Edmunds in a $404 million deal. The deal, combined with CarMax's previous $50 million minority stake in Edmunds, is expected to close in June. The latter will continue to operate independently once the transaction closes. A partnership between the two companies has existed since January 2020 when CarMax made its initial investment in Edmunds, and the two developed an online instant offer for sellers of used vehicles in addition to other innovative projects. After acquiring all of Edmunds, management believes it will accelerate their ability to enhance the online consumer's digital experience.
"We are excited to bring the iconic Edmunds brand, history of innovation, and exceptional technology and creative talent into the CarMax family," said Bill Nash, CarMax's president and CEO, in a press release. "The instant offer products on Edmunds.com and CarMax.com have put CarMax in the position to become the largest online buyer of used autos from consumers," Nash continued.
This acquisition is certainly not an April Fool's joke as the used car retailer has long touted its goal of giving consumers the ability to decide when, where, and how they wish to purchase their vehicle. Over the past year, COVID-19 disruptions have pushed retailers to focus online. In fact, CarMax noted in its Q4 results that three-quarters of its consumers advanced their transaction digitally. Acquiring Edmunds to improve consumers' ability to research vehicles will only improve CarMax's omnichannel presence.