By Angus Dalton
Vehicle listing business carsales.com, which runs Australia’s largest online marketplace for cars, motorbikes and boats, is seeking to raise $1.2 billion from shareholders to fully acquire US listings business Trader Interactive.
Carsales, which took a 49 per cent stake in Trader Interactive last year, will acquire the remaining 51 per cent of the US company it does not already own for about $1.17 billion.
Chief executive Cameron McIntyre said he expected the takeover to generate “attractive financial returns for shareholders”.
“During the course of the last 12 months we have become even more excited about the value of the Trader Interactive business and its growth potential,” McIntyre said.
“Culturally, there is strong alignment between the carsales and Trader Interactive teams and we are looking forward to working more closely together to unlock the significant potential in the business.”
Carsales is looking to raise $1.2 billion by issuing 68 billion new shares at $17.75, a 14.5 per cent discount from Friday’s closing price of $20.76.
Trader Interactive hosts branded online marketplaces and offers digital marketing services primarily for trucks and recreational vehicles (RVs) in the US. The company had an adjusted revenue of $US125 million ($181 million) in the 2021 financial year.
Trader Interactive boss Lori Stacy said the company was “thrilled” to join the Carsales group.
“We have thoroughly enjoyed working with Cameron and the carsales team over the last twelve months and we can see how compatible we are from a culture and strategy perspective.
“Trader Interactive is a great business with a proud history and we are incredibly excited about the value that we can generate by leveraging carsales’ product and technology capability.”
Carsales’ share price has fallen from an all-time high of $26.44 in December 2021 but prices are still higher compared to their pre-pandemic price. The cost of cars on the site rose 30 to 40 per cent during lockdowns and demand for trucks, boats and caravans spiked.
The company reported profits of $131 million last financial year and expects to report profits of between $161 million-$163 million this year, up 23-25 per cent.
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