Auto Trader Group plc, the UK’s largest automotive marketplace, has agreed to acquire Autorama (UK) Limited, one of the UK’s largest transactional marketplaces for leasing new vehicles.
Autorama has created a leading end-to-end digital platform, which aggregates leasing deals from multiple funders and OEMs (under its “Vanarama” brand), enabling buyers to transact online across a wide range of vehicles.
The acquisition will transform Auto Trader’s existing leasing proposition and help to meet the demands of the growing number of consumers who might consider leasing their next new vehicle. In time, it will enable Autorama to leverage Auto Trader’s brand to accelerate its recent expansion, beyond light commercial vehicles, into leasing new cars.
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.
Nathan Coe, Chief Executive Officer of Auto Trader, 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. I am delighted to be welcoming Andy and his team to the Group.”
Andy Alderson, Chief Executive Officer at Autorama, said: “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.”
Auto Trader will pay initial consideration of £150 million in cash, with a further £50 million of deferred consideration to be settled in shares subject to customary performance conditions 12 months after the completion date.
Once issued, the shares will vest over a period of two years in two 12 month instalments. At 31 December 2021, Autorama had £27m of gross assets and for the calendar year 2021, made net revenue of £26m, selling c.14,500 vehicles and had an EBITDA loss of £6m, which included marketing costs of over £9 million.