WeBuyCars to sell stake to SA Taxi funder after Naspers venture setback
Taxi financier Transaction Capital is set to buy a noncontrolling stake in used-vehicle retailer WeBuyCars for R1.84bn, the company said on Tuesday.
Transaction Capital CEO David Hurwitz said the company ’ s investment in WeBuyCars will boost earnings and that it is an exceptional opportunity to own a significant stake in a trader of used vehicles. In SA, there are 10.8-million new and used passenger vehicles in circulation.
The used-car industry trades more than 1-million vehicles yearly and has been growing at 1.7% over the last five years.
“We are confident and excited about the prospect of acquiring an interest in WeBuyCars that will support an even higher growth and returns trajectory as WeBuyCars fully realises its medium-term growth potential,” Hurwitz said.
WeBuyCars, which is valued at R3.69bn, will continue to operate as an independent business within its specialised market, adjacent to SA Taxi, Transactional Capital said.
Both parties believe WeBuyCars can develop and grow into another exceptional business and reach its full potential notwithstanding the difficult economic conditions that will be with all of us for some time,” Transaction Capital said.
The privately owned WeBuyCars was started 20 years ago by Faan and Dirk van der Walt, who own 60% while the rest of the shares, 31.5% and 8.5%, are held by a private equity investor, Fledge Capital Proprietary, and unnamed minority shareholders respectively. Once the sale is concluded, Transaction Capital will own 49.9% in WeBuyCars.
The remaining 50.1% will be held by WBC Holdings, to be controlled by the family trusts of Faan and Dirk van der Walt.
WeBuyCars CEO Faan van der Walt said: “Over the years we have been approached by many high-profile buyers interested in partnering with us.
“Transaction Capital’s entrepreneurial ownership mindset, underpinned by the ongoing involvement of its founders, makes the group a good share©Telegraph Media Group Limited (2020) holder for founder-led businesses like WeBuyCars.”
The deal comes more than a year after the Competition Commission (which assesses large mergers before referring them to the Competition Tribunal for a final decision) blocked Naspers’s proposed deal to take over WeBuyCars. The group — through its unit MIH e-commerce, which owns AutoTrader
sought to acquire 60% of WeBuyCars in a deal worth R1.4bn.
At the time, the commission recommended that the deal be blocked, saying it could lead to higher used-car prices. The merger could stop other businesses with similar activities from entering the market, it said.
MIH e-commerce and WeBuyCars had opposed the commission s recommendation.
OVER THE YEARS WE HAVE BEEN APPROACHED BY MANY HIGH-PROFILE BUYERS