Trading in shares in carsales.com was halted to allow it to start the raising of $A600 million to fund its move into the US market.
Carsales revealed that it planned to buy a 49% stake in US marketplace platform Trader Interactive for a total of $US624 million ($A797 million) which puts an enterprise value on Trader of just under $A2 billion (which includes debt). The remaining $222 million will be funded by debt and cash on hand.
Carsales.com said the purchase represents a “strategically compelling transaction” to grow and diversify its business internationally with “exposure to appealing verticals in the large US market”.
Trader Interactive is a big player in the US across RVs (recreational vehicles) and powersports, with a leading position in the trucks and equipment categories, and claims a strong portfolio of branded marketplaces with a large customer base.
The purchase will be funded by a combination of equity and debt, with the company launching a $600 million fully underwritten pro-rata accelerated renounceable entitlement offer.
Eligible shareholders will be entitled to subscribe for 1 new carsales.com share for every 6.99 shares held at $17 a share.
That’s a 12.9% discount to Tuesday’s closing price of $19.51.
The institutional offer opened yesterday and closes today and any shortfall to be sold via a bookbuild. The retail offer opens on Wednesday next week.
“This acquisition is expected to accelerate our international growth strategy by providing us with exposure to a significant market in the United States across attractive non-automotive verticals,” carsales.com CEO Cameron McIntyre said in a statement to the ASX.
“We are excited by the opportunity this investment provides carsales and look forward to working closely with Trader Interactive in helping them achieve their objectives and delivering shareholder value.”
