Tenzing taps Raymond James for CItNow exit

Charlie Taylor-Kroll , Josh O'Neill and Min Ho
02 February 2022

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Tenzing is exploring an exit for CItNow, a UK-based software company serving the car dealership sector, three sources familiar with the situation have said.

Raymond James has been appointed to handle the exit, two of the sources said.

CItNow – which provides video tools for automotive dealership's to communicate repair requirements with customers – is expected to come to market later this year, one of the sources said.

The company's EBTIDA in 2020/21 was north of GBP 10m, a fourth source familiar with the situation said.

CItNow generated adjusted EBITDA of GBP 5.6m in 2020, up 57% from the GBP 3.6m recorded the year before. This increase was driven by increasing revenues, alongside high growth margins and cost savings, according to the most recent companies house filings. Revenues rose 2% to GBP 17.45m from GBP 17m in the period.

The company has grown well in recent years through several add-on deals, a banker familiar with the company said. Last year, the company acquired US-based automotive software-as-a-service companies Quik and Reef Business Systems for undisclosed amounts. The company also acquired sales and management software firm Dealerweb in December 2020.

CItNow's app improves the performance of car dealerships by allowing staff to send personalised, branded video presentations of vehicles for sale or in the shop for repair, according to the company's website.

The take-private of automotive dealership software provider CDK Global by Francisco Partners is among comparable deals in the space, two sources said. CDK Global, which was rebranded as Keyloop last year, was valued at 4.5x 2020 revenues, according to Mergermarket data.

Automotive Transformation Group (ATG), a UK automotive software provider that was acquired by Inflexion in July 2019, is another similar company operating in the space, the banker said.

CItNow has also benefited from a surge in demand in secondhand car sales, the banker familiar with the company said: "Anything that facilitates the buying process by using technologies is going to have been positively impacted."

CItNow was founded in 2009. Its video services have been used by 43 car manufacturers worldwide, according to its website. Tenzing invested the company in 2018.

Raymond James declined to comment. Tenzing and CItNow did not respond to requests for comment.