Carsales (ASX:CAR) halts trading on acquisition and $1.2 billion rights offering – The Market Herald

• Carsales.com (CAR) is set to acquire the remaining 51% stake in Trader Interactive for US$809 million (A$1.17 billion)
• As such, it launched a $1.2 billion fundraising round including a fully subscribed rights offering for institutional and retail investors.
• The billion-dollar stock will also seek to increase its credit facilities from $900 million to $1.4 billion to replace the existing $562 million credit facility at Trader Interactive.
• Carsales Managing Director and CEO Cameron McIntyre says the acquisition is a “natural evolution” of the company’s international growth strategy into a large and attractive market
• Carsales shares last traded at $20.76 as of June 24

Carsales.com (CAR) has ceased operations following its decision to acquire the remaining 51% stake in Trader Interactive for US$809 million (A$1.17 billion).

As such, the online auto marketplace company launched a $1.2 billion fundraising round, including a fully subscribed one-for-4.16 accelerated and non-waiverable right offering for institutional and retail investors. .

The company will also simultaneously seek to increase its credit facilities from $900 million to $1.4 billion to replace the existing $562 million credit facility at Trader Interactive.

The offering will be made at $17.75 per new share, which represents a 14.5% discount from the last closing price on June 24 and will rank pari passu with the existing shares.

The institutional rights offering ends June 28 and the retail rights offering opens July 1 and closes July 13.

Founded in 2010, Trader Interactive is an integrated branded marketplace platform in the United States that provides digital marketing solutions and services in the commercial truck, RV, powersports and equipment industries.

According to Carsales, the acquisition represents a strategically compelling transaction for the company and its shareholders.

Carsales Managing Director and CEO Cameron McIntyre said the acquisition is a “natural evolution” of the company’s international growth strategy into large and attractive markets.

“We have demonstrated an excellent track record of creating strong shareholder value by diversifying into international markets.

“Moving to 100% ownership will allow shareholders to capture the significant growth potential of this business.

“The acquisition is expected to generate attractive financial returns for shareholders with a low double-digit EPS increase in the first year.”

Key strategic highlights include market-leading positions in attractive non-automotive verticals in the United States, which are 16 times larger than the Australian non-automotive market, favorable structural trends through growing participation in manufacturing industries. RV and motorsports and significant future growth potential and expected synergies of less than 100 percent car sales ownership.

The company said its business continued to perform well, with an estimated 16% growth in FY22 revenue, reflecting the “continued strength” of its Australian and international businesses.

“Domestic business performance over the first five calendar months reflects continued healthy demand levels in the Australian automotive and other product markets, as well as increased adoption of key growth products,” the company said. in his press release.

The acquisition is subject to conditions, which are expected to be satisfied at the end of the September quarter.

Carsales shares last traded at $20.76 on June 24.