Australian online auto classifieds firm, Carsales.com Ltd, said that it is set to acquire the remaining 51% stake in U.S.-based Trader Interactive for USD 809 million, a year after buying 49% in the Virginia-based online advertising company.
In May 2021, Carsales.com had paid USD 624 million for the stake it owned in Trader Interactive. The deal announced on Monday, now values Trader Interactive at an enterprise value of USD 1.90 billion.
Melbourne-based Carsales.com also said that it will fund the merger through an equity raising of AUD 1.21 billion (USD 839.14 million) at AUD 17.75 per new share, a 14.5% discount to its last closing price.
The CEO, Cameron McIntyre said that the acquisition is expected to generate an attractive financial return for shareholders with low double-digit EPS accretion in the first year.
Carsales.com also said that the performance in the first five months of fiscal 2022 reflects on continued healthy levels of demand in the Australian automotive and non-automotive markets.
It expects adjusted net profit after tax of between AUD 194 million and AUD 196 million for the fiscal year 2022, higher than last year’s AUD 153 million.
Trader Interactive was founded in 2010. The company owns a plethora of lifestyle vehicle marketplaces that connect buyers, sellers, and renters in the marine, powersports, RVs, aircraft, commercial vehicle, and heavy equipment industries. The company is based in Norfolk, Virginia and employs around 350 employees.
In FY21, TI’s platforms, which collectively reached more than 22 million monthly unique visitors last year and generated adjusted revenue of USD 180 million and adjusted earnings of USD 99.7 million.
Over the last five years, Carsales.com said the company which currently has a 6% market share in Australia, has delivered double-digit revenue and earnings.
According to CAR, the US non-automotive market is 16 times larger than its Australian counterpart and is twice the size of the Australian automotive market.
McIntyre said that the acquisition is a natural evolution of our international growth strategy into large, attractive markets. The company has demonstrated an excellent track record of delivering strong shareholder value by diversifying in international markets.
Trader Interactive CEO Lori Stacy said that the Trader Interactive is a great business with a proud history and that the company is extremely excited about the value that it can create by leveraging Carsales’ product and technology capability.
This will enable them to increase the immense value that the company already provides for the customers. They are thrilled to join the Carsales Group and look forward to a strong future together.
The acquisition is subject to various terms and conditions, which are expected to be fulfilled by Q1FY23.
About Carsales.com Ltd
Carsales.com Limited is one of the largest Australia-based online automotive, motorcycle, and marine company. The company provides a marketplace to buy and sell cars, trucks, motorcycles, boats, and caravans. The firm operates through five segments, Australia Online Advertising Services, Australia Car Sales Investments, Australia Data, and Research and Services.
Australia Online Advertising Services segment provides display advertising services and online automotive classifieds.
Australia Car Sales Investments Segment provides online tire retail and wholesale, mobility services and inspection services.
Australia Data, Research and Services segment provides automotive data services, including software analysis, research and reporting, valuation services, hosting and photography services, and website development.
Together with its subsidiaries, the company employs over 600 people in Australia. The company’s vision is to provide a smooth car buying and selling journey to Australians.