Filing Flows › CarGurus (CARG) › Takeover & LBO
Is CarGurus (CARG) a takeover target?
A leveraged buyout at today's price plus 30% ($37.51 a share) would return about 7% a year to a private-equity buyer over 5 years; no price, however low, gets a buyer to 20%. Historically 4.5% of companies with its figures were bought within a year (0.9× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $37.51 | today's $28.85 plus 30% |
| × shares | 91.1 million | |
| = Equity value | $3.4B | |
| + Debt refinanced | $0 | |
| − Cash | $122M | |
| = Enterprise value | $3.3B | 12.4× EBITDA of $267M |
| Fees | $65.9M | 2% of the price |
| New debt | $1.5B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $1.9B | 56% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $1.0B | $288M | $112M | $131M | $1.3B |
| Year 2 | $1.1B | $307M | $102M | $154M | $1.2B |
| Year 3 | $1.2B | $324M | $90.3M | $178M | $1.0B |
| Year 4 | $1.2B | $338M | $76.7M | $200M | $803M |
| Year 5 | $1.3B | $348M | $61.4M | $221M | $582M |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 9.4× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $3.3B | |
| − Debt left | $582M | |
| = Buyer's equity | $2.7B | |
| Money multiple | 1.42× | on $1.9B put in |
| Buyer's yearly return (IRR) | 7.3% |
Price against return
What the buyer makes at other premiums over today's $28.85.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $31.74 | 14.7% |
| 20% | $34.62 | 10.6% |
| 30% | $37.51 | 7.3% |
| 40% | $40.39 | 4.5% |
| 50% | $43.28 | 2.1% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $967M | |
| EBITDA, last 12 months | $267M | 27.6% of revenue |
| Depreciation and amortization | $30.2M | |
| Capital spending | $3.5M | |
| Debt | $0 | |
| Cash | $122M | |
| Share price | $28.85 | on Oct 9, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows 8.0% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 23% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers in its sector paid a median premium of 30% over the share price before the deal (the middle half 12% to 31%), according to the 14 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, CarGurus would cost about $37.51 a share, $3.4B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 12% | $32.31 | $2.9B |
| Median | 30% | $37.51 | $3.4B |
| High end (a quarter paid more) | 31% | $37.79 | $3.4B |
The odds, from history
Historically 4.5% of companies with its figures were bought within a year (0.9× the average). Its figures put it in decile 5 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
CarGurus' latest quarter
CarGurus, Q3 2026: revenue $258M (+12% year over year), operating margin 26.3%, net earnings $52.8M, operating cash flow $80.8M. The chart follows the revenue to costs, profit and cash.
Questions
Is CarGurus being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy CarGurus?
A leveraged buyout at today's price plus 30% ($37.51 a share) would return about 7% a year to a private-equity buyer over 5 years; no price, however low, gets a buyer to 20%.
What would a takeover of CarGurus cost?
Takeovers in its sector paid a median premium of 30% over the share price before the deal (the middle half 12% to 31%), according to the 14 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, CarGurus would cost about $37.51 a share, $3.4B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.