Motor listings site Auto Trader to buy Vanarama owner for up to £200m in a bid to ‘transform’ its leasing business
- Auto Trader will pay £150m in cash and up to £50m more in shares
- Autorama made £26m in revenues last year and an EBITDA loss of £6m
Auto Trader has agreed to purchase Autorama for up to £200million in an effort to ‘transform’ its leasing business.
Britain’s largest automotive marketplace is hoping to cash in on growing demand for leasing, which helped net Autorama £26million in revenues last year.
The deal, which is subject to regulatory approval, will see Auto Trader pay £150million in cash up front, with a further £50million paid in performance-linked shares over a two-year period.
Vanarama is the sponsor of the National League – the top level of non-league football in England
Autorama, which owns the Vanarama brand, had £27million of gross assets at the end of 2021, having sold 14,500 vehicles for an EBITDA loss of £6million.
The firm, which employs around 230 people, offers a digital platform for leasing deals enabling buyers to transact online across a wide range of vehicles.
Auto Trader said the acquisition will ‘transform’ its existing leasing proposition, while enabling Autorama to leverage its brand to accelerate its recent expansion, beyond light commercial vehicles, into leasing new cars.
It added: ‘There is a large structural opportunity for a new car leasing marketplace driven by the growth of electric cars, new manufacturers entering the UK market, lower take up of company car schemes and a shift towards new digital distribution models.
‘Leasing provides consumers a cost-effective way to access a new car with a model that is consistent with any future move towards usership.’
Auto Trader has been buoyed in recent times by surging second-hand car prices, with February data suggesting that used motors are 31.9 per cent more expensive than a year ago.
The digital automotive marketplace posted record profits in the six months to 30 September last year, with revenues up 82 per cent on the same period in 2020 to £215.4million.
Auto Trader shares were down 3 per cent in the wake of the announcement to 654p. It remains 10.1 per cent above its pre-pandemic peak.
Nathan Coe, chief executive, said: ‘To ensure we have the largest choice of cars to buy online, we could not ignore the growing demand for leasing deals.
‘In Vanarama, we have found an industry leading leasing platform that delivers a great consumer experience and significant sales for its partners. This acquisition will strengthen our leasing business and will enable us to offer both the biggest choice of vehicles and a seamless digital experience from search to sale.’
Andy Alderson, chief executive of Autorama, added: ‘As the leading aggregator of leasing deals online, we have sold over 120,000 vehicles for our manufacturer, retailer and lease company partners.
‘Over the last few years we have invested significantly in our technical capability to help our partners respond to the high levels of consumer demand for a digital buying experience.
‘We are hugely excited about the prospect of being able to accelerate our growth plans and deliver even more value to our partners as part of the Auto Trader Group.’