THE automotive market place, Auto Trader, has acquired van specialist leasing broker Vanarama.
Auto Trader has paid £200m to acquire the share capital in Autorama, the owner of the Vanarama brand.
The FTSE 100 company said it was attracted by Vanarama’s position as one of the leading platforms for leasing deals and its partnerships with OEMs, funders and retailers.
In turn it would transform Vanarama from its current light commercial vehicle specialism and let it expand into cars by accessing Auto Trader’s brand.
There is a large structural opportunity for a new car leasing marketplace driven by the growth in electric vehicles, 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 toward usership.
To ensure we have the greatest 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 existing leasing business and will enable us to offer both the biggest choice of vehicles and a seamless digital experience from search to sale.Nathan Coe, chief executive officer, Auto Trader
Andy Alderson, Vanarama’s chief executive officer added: “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 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.”
The deal sees Auto Trader paying an initial tranche of £150m in cash, with a further £50m in shares to be deferred subject to customary performance conditions 12 months after the completion date.
In its statement to the market, Auto Trader said Autorama, as at 31 December 2021, had £27m of gross assets and for the calendar year 2021, made net revenue of £26m, selling c14,500 vehicles and had an EBITDA loss of £6m, which included marketing costs of over £9m.
Completion of the deal will be subject to regulatory approvals.
Read our analysis of the deal
Click here to read: Why has Auto Trader bought Vanarama?
Ralph Morton is the leading journalist in the leasing broker sector and editor of Broker News, the website which provides information and news for BVRLA-registered leasing brokers. He also writes extensively on the fleet and leasing market in both the UK and Europe.