A$16.7mil acquisition to be completed in mid-December 2014
One2Car positioned for premium market, targeting new cars and larger dealers
AUTOMOTIVE online classifieds company iCar Asia Ltd has agreed to buy Thailand-based automotive online classifieds site One2Car Co. Ltd for A$16.7 million, comprising A$13.4 million cash and A$3.3 million worth of new iCar shares.
[A$1 = US$0.87]
The acquisition was made possible after it successfully completed a A$21 million placement exercise at a placement price of A$1.1 per new share. The placement was completed yesterday, according to filings made to the Australian Securities Exchange (ASX) by the company today (Nov 13).
At the placement price of A$1.10, it represents a 9% discount to the closing price of A$1.21 prior to the trading halt entered into by the company on Nov 11.
The acquisition is subject to satisfaction (or waiver) of a number of conditions and is expected to be completed in mid-December 2014.
Khun Teerawat, the chief executive officer (CEO) of One2Car will remain with the business for two years, while the company’s two co-founders will be subject to a two-year non-compete clause.
Game changing acquisition
iCar CEO Damon Rielly (pic) described the deal as a “game changing acquisition” and something the company has been working on for over two years.
“The acquisition ... takes us straight to a leadership position on all core operating metrics of Listings, Audience & Leads, with approximately 90% of all car dealers in greater Bangkok paying to advertise on our sites.
“Together with iCar’s existing Thailand assets, Autospinn and Thaicar, we will hold a strong market leadership position in the country,” he added.
For now it appears that the company has no plans to merge both One2Car and Thaicar into one brand.
In its presentation slides to shareholders and investors, the company said it plans to operate a two-brand strategy, with One2Car positioned in the premium market, targeting new cars and larger dealers, while Thaicar will target the small dealership market and private sellers.
Prior to the acquisition, One2Car had an audience of 1.25 million, Autospinn had 866,000 and Thaicar had 461,000. The acquisition will allow the iCar group to have a combined audience size of 1.71 million, almost double the size of Autospinn, iCar said.
With this, the group can now focus on monetising strategies, it added.
“Malaysian and combined Thailand operations on path to profitability by end of 2015,” said iCar in its presentation slide posted on ASX.
iCar’s technology platform and its Response Management System (RMS) for car dealers will also be deployed across One2Car’s platform.
One2Car.com has been established for over 12 years and claims annual revenues of approximately A$1.5 million.
Besides attracting an audience of more than 1.2 million unique visitors every month, it also has approximately 1,800 car dealers in the greater Bangkok area paying a monthly subscription to list their cars on the site.
According to details provided by iCar, it is estimated that in excess of 80% of all car buyer leads to car dealers in greater Bangkok are generated by One2Car.
Share purchase plan
Meanwhile, all eligible iCar shareholders will be offered the opportunity to take part in a share purchase plan, which will provide eligible shareholders with the ability to subscribe for up to $15,000 worth of new shares free of brokerage and transaction costs.
The SPP will seek to raise about A$4 million. Like the institution placement, the new shares under the SPP will also be done at A$1.10 per share.
Sharehlders with a registered address in Australia or New Zealand and who were on the register at 7pm on Wednesday, Nov 12, will be eligible to take part in the SPP.
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