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Carsales Acquires Chileautos for US$15 Million

Carsales Acquires Chileautos for US$15 Million
Carsales has acquired an 83% interest in Chileautos, the number one automotive classified website in Chile
Mar 29, 2016 By Kaivalya Kandarpa Tags: CAR

carsales.com Limited (ASX:CAR) announced that the company has acquired a controlling shareholder interest of 83% in Chileautos, the number one automotive classified website in Chile.

Carsales is set to pay US$15 million for the investment, funded from existing cash reserves and its syndicated debt facilities. The company also retains an option to acquire the remaining 17% stake within the next four years. This transaction is expected to make a positive contribution to EBITDA, however it is projected to be Earning per Share accretive after the first year of ownership.

Mr. Paul Barlow, Director of the company’s International segment commented on the acquisition: “We look forward to partnering with Chileautos and utilising carsales’ IP, technology and knowhow to capitalise on Chileautos’ already excellent market position. This is a prime strategic opportunity to take another Spanish speaking business to the next level.”

Mr. Barlow further added that the company views Latin America as an ‘extremely attractive market’, as it aims to capitalise on its Spanish language technology rollout in Mexico and achieve economies of scale in the region.

During the 1H16 period, carsales acquired a 65% stake in SolosAutos, a Mexican based auto classifieds site, for US$9 million.

NPAT Expanded 10% in 1H16

The company achieved 11% revenue growth for the six months ended 31 December 2015. Its international investments such as South-Korean based SKENCarsales and Latin American WebMotors have generated 22% and 14% local currency revenue growth during the period. Overall, EBITDA and NPAT expanded 12% and 10% compared to pcp.

The board declared a fully franked interim dividend of 17.8 cents per share, a 10% rise on the previous distribution. The company expects to generate solid revenue and EBITDA growth while NPAT is anticipated to grow more moderately.

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Kaivalya Kandarpa Author: Kaivalya Kandarpa Mar 29, 2016

Kaivalya is an equity analyst and a client advisor at Wise-owl. She specialises in fundamental and technical analysis for large and mid-cap companies. Having completed her bachelor's degree in Business Administration majoring in Finance, Kaivalya has a comprehensive understanding of international stock market movements. She tracks local and overseas markets and compiles analytical reports for various industries.

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