Transaction Capital, the owners of SA Taxi, is in talks to buy an additional stake in WeBuyCars, a South African online car marketplace.
The JSE-listed company informed investors today that it has entered formal negotiations with WBC Holdings (WBC Holdco), the holding company of WeBuyCars, and its shareholders to conclude a transaction in the short term.
Transaction Capital said the deal would result in Transaction Capital Motor Holdco holding 74.9% of the shares in and acquiring control of WBC Holdco. Founders of WeBuyCars would have the remaining 25.1% stake.
The company currently holds a 49.9% stake in the South African online car marketplace. Transaction Capital bought the shares on 11 September 2020.
Post the transaction, the enterprise value of WeBuyCars would be R3.69 billion.
Transaction Capital said it has a robust balance sheet with ample capacity to fund organic growth. The company added that R1.1 billion of new equity raised over the past 12 months to part-fund the group’s value and accretive earnings investment in WeBuyCars.
WeBuyCars is South Africa’s trusted trader of used vehicles through its vertically integrated, data and technology-led e-commerce and physical infrastructure.
Transaction Capital said WeBuyCars is uniquely positioned in South Africa’s large & resilient used vehicle market.
WeBuyCars reported a 38% rise in headline earnings to R257 million for the six months to end-March 2021.
Headline earnings attributable to Transaction Capital was R113 million versus R19 in full-year 2020.
The South African online car marketplace also reported a 36% rise in revenue to R4.7 billion.
WeBuyCars uses artificial intelligence technology to adjust pricing according to the value and demand of a vehicle. It extends its offering beyond buying and selling cars as a principal and offers finance, insurance, tracking and other allied products as an agent.
The company has a nationwide presence with seven vehicle supermarkets, 22 buying pods, more than 170 national buyers. It is planning to open a new eight-vehicle supermarket in Gauteng on 1 June 2021.