CAR halt: the online car classified business spent the day in a trading halt as it manages a $500m capital raise to fund a further stake in Brazil’s Webmotors. Carsales is buying a 40% stake, taking their total holding in the business to 70%, paying $353m, valuing the business on 21.7x FCY22 EBITDA. The business is number one in the Brazilian market, the 5th largest car market globally, with an EBITDA compounding annual growth rate (CAGR) of 28% since 2017. The deal will see carsales end up with around 50% of their revenue and earnings coming from international markets. The sizable raise will be completed through an entitlement offer for shareholders, while additional funds are being raised to reduce debt to provide flexibility for other growth options.
MM is neutral to bullish CAR
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