carsales.com Ltd (ASX:CAR) → Trader Interactive, LLC (remaining 51% stake)
completedcarsales.com exercised its call option to acquire the remaining 51% stake in US-based Trader Interactive, LLC from Eurazeo SE for approximately US$809 million (A$1,183.2 million), announced 27 June 2022, taking carsales to 100% ownership. The deal valued Trader Interactive on a 100% enterprise-value basis at US$1,897 million (~A$1.9 billion equivalent disclosed by carsales as approximately US$1.9 billion / A$2.75 billion), representing an annualised Q4 FY22 EV/adjusted EBITDA multiple of 21.3x. The transaction completed on 30 September 2022.
carsales had held a 49% stake in Trader Interactive since May 2021 and viewed full ownership as a natural next step to consolidate control of a fast-growing US digital marketplace platform (spanning commercial truck, RV, powersports and equipment verticals), accelerating its international diversification strategy and giving full access to Trader Interactive's cash flows and strategic direction.
Eurazeo SE, the private equity owner of the remaining 51% since selling its initial 49% stake to carsales in 2021, exercised the pre-agreed exit mechanism (put/call option structure) to fully realise its investment in Trader Interactive at an attractive multiple.
carsales.com shares were placed in a trading halt around the announcement while the company launched a fully underwritten ~A$1,207 million 1-for-4.16 accelerated non-renounceable entitlement offer to fund the deal; this follows a pattern from the original 2021 stake purchase, when carsales shares fell around 7% on resumption of trading, reflecting some investor caution about acquisition size and dilution risk.
Coverage described the transaction as consolidating carsales' US growth bet after a cautious initial market reaction to the 2021 stake purchase, with the high EBITDA multiple (21.3x) drawing some scrutiny but generally read as consistent with valuations for high-growth digital marketplace assets.
Deal mechanics
All-cash purchase via exercise of a pre-agreed call option over the remaining 51% of Trader Interactive, funded by a fully underwritten approximately A$1,207 million 1-for-4.16 pro-rata accelerated non-renounceable entitlement offer at A$17.75 per new share.
21.3x annualised Q4 FY22 EV/adjusted EBITDA (100% enterprise value ~US$1.9 billion)
Fully underwritten ~A$1,207 million accelerated non-renounceable entitlement offer (equity raising).
Learn more
- Australia's Carsales.com to buy 51% in U.S. firm Trader Interactive - Reuters via Yahoo Finance
- Carsales to acquire remaining 51% of Trader Interactive and launch a ~AU$1.207 billion equity raising - Kapitales Research
- 51% Acquisition of Trader Interactive and Equity Raising - carsales.com ASX announcement
- Carsales.com Ltd completed the acquisition of remaining 51% stake in Trader Interactive, LLC from Eurazeo SE - MarketScreener
- How has the Carsales share price performed after past acquisitions? - Motley Fool Australia