Transaction Capital eyes majority stake and global expansion for Webuycars
Transaction Capital, one of SA’S largest financiers of minibus taxis, has begun negotiations to increase its minority stake in Webuycars that could cause it to take control of one of the country’s largest second-hand car businesses and possibly expand internationally.
The company on Wednesday alerted shareholders to negotiations that could cause it to increase its stake to 74.9% from 49.9%, just a year after it acquired its stake.
“The existing shareholders are very comfortable with us as partners and they approached us. While it is obviously at a very early stage, we love this business and think there could be some type of global angle to expanding it,” said Transaction Capital CEO David Hurwitz.
Transaction Capital reported interim results to end-march on Wednesday that showed a sharp rebound in profitability. Core headline earnings rose 56% to R437m from the same period a year ago.
Comparing the half-year results to 2019s ’ pre-covid halfyear performance, the group’s core headline earnings from continuing operations grew 29%.
The group bought its stake in Webuycars in September last year for R1.84bn and says the deal has been earnings and value accretive. The division contributed R113m to core headline earnings for the period.
At the time of acquisition, Webuycars was trading 6,0007,000 cars monthly. Transaction Capital said in March the business bought and sold about 8,000 cars and remains on track to meet its medium-term target of 10,000 vehicles a month.
Hurwitz says Transaction Capital continues to be impressed with the performance of the business and looks forward to the negotiations regarding taking a controlling stake.
The proposed transaction would cause Transaction to acquire Fledge Capital’s stake, while the founders of the business, Dirk and Faan van der Walt, will retain a 25% stake.