Auto Trader snaps up leasing marketplace Autorama for £200m
Auto Trader announced today it has snapped up Autorama, one of the UK’s largest digital leasing platforms, for £200m.
Auto Trader will pay an initial £150m in cash, while an additional £50m will be paid in shares a year after, but vesting over the following two. Subjected to regulatory clearance, the deal will be completed in early FY23.
The company said the takeover will help it expand its existing leasing market, while providing Autorama with Auto Trader’s brand to accelerate its expansion.
“To ensure we have the largest choice of cars to buy online, we could not ignore the growing demand for leasing deals,” said Auto Trader’s chief executive Nathan Coe.
“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.”
Commenting on the news, analysts at BofA Securities maintained the group’s Buy recommendation and 840p per share target price.
“Despite a still challenging market backdrop Auto Trader is powering ahead, doubling down on ambitions to achieve a more transactional marketplace from a strengthened position vs. pre-pandemic,” read the analysts’ note.