Carsales.com is looking for half a billion dollars in a new capital raising to finance its decision to boost its stake in Brazil’s biggest online car sales market.
The shares were halted on Wednesday to allow the raising to happen via a fully underwritten 1 for 14.01 pro-rata accelerated renounceable entitlement offer (with retail rights trading) at $19.95 a share. That was a 11.9% discount to the last sale on Tuesday of $22.64.
According to Wednesday’s release, the company has signed an agreement with Brazil’s Banco Santander to acquire an additional 40% of Webmotors for approximately $A353 million and take its stake to 70%. Webmotors is the number one automotive digital marketplace in Brazil.
Carsales 70% move will see Banco Santander retain a 30% stake and continue to be the credit and financial solutions partner for finance and insurance transactions made through the Webmotors platform.
Carsales said the move to a controlling stake “will allow Webmotors to benefit further from its expertise in digital marketing, customer experience, products, and services within the digital automotive ecosystem.”
Carsales said Webmotors generated $A100.5 million revenue and $A40.7m EBITDA in the twelve months to December 2022, “and has a strong track record of growth with 23% revenue and 28% EBITDA compound annual growth since 2017.”
“Webmotors offers marketplace services for dealers, private party sellers and digital advertisers. In addition to the leading marketplace business, Webmotors has a suite of deep integrations, including a digital credit check and loan application integration with Santander, a sophisticated CRM system to manage leads and inventory, a car pricing and valuation tool, a wholesale trading program as well as a fully online dealer training platform.
The statement said Webmotors has approximately 430,000 dealer and private ad listings, 17,000 subscribed dealer customers, generates over 320 million annual website visits and claims over 16 million leads to car sellers.
Carsales said the deal was “a strategically compelling transaction for Carsales and its shareholders as Brazil is the one of the largest automotive markets in the world with nearly 80 million cars on the road and a high number of used car transactions.
Carsales CEO Cameron McIntyre said in the statement to the ASX, “Carsales and Santander have developed a strong working partnership over the last 10 years of joint ownership in Webmotors, which is reflected in Webmotors’ market leadership in one of the largest and fastest growing car markets in the world.”
“Closer alignment to the Carsales business makes strategic sense for both Carsales and Santander to ensure Webmotors’ continued long term success and delivery of value to our shareholders. With this acquisition Carsales and Santander reverse equity positions in Webmotors and maintain Santander’s important commercial exclusivity for credit and financial solutions on the Webmotors platform.”
