The online car classified business executed a large $500m capital raise to fund a further stake in Brazil’s Webmotors. They bought an additional 40% stake, taking their total holding in the business to 70%, paying $353m, valuing the business on 21.7x CY22 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 CAR end up with around 50% of its revenue and earnings coming from international markets – an overhaul good move in our opinion.
- We now like the risk/reward towards CAR following the solid reaction to its capital raise/expansion plans.
MM likes CAR around $22 looking test of the stock high
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