WeBuyCars snaps up 49% of GoBid for R377m

WeBuyCars has announced the acquisition of a 49% stake in the digital vehicle auction platform GoBid for R376.8 million.

The transaction, concluded through its wholly owned subsidiary, includes call and put options that could see WeBuyCars lift its shareholding to 51% within a year, and potentially acquire the remaining shares over time, subject to performance-linked mechanisms.

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GoBid operates an online auction platform focused on accident-damaged, uneconomical-to-repair and second-hand vehicles. WeBuyCars currently uses the platform to dispose of non-runners, write-offs, salvage vehicles and stock that does not meet its quality standards.

WeBuyCars stock traded at R47.47 at around 4pm, 0.52% lower than on Friday.

The company says the deal supports its strategy by increasing the volume of WeBuyCars vehicles routed through the platform, thereby enhancing value for the company as a significant shareholder in GoBid.

This is fully aligned with its strategic objective of servicing the entire South African vehicle market by acquiring vehicles across all categories and in any condition.

Details of the acquisition

Under the transaction structure, WeBuyCars acquired 40% of GoBid from Taximart for R314.8 million, and a further effective 9% from a group of shareholders including Fledge Capital, Aldusign and Palamo for R61.9 million.

Taximart’s beneficial owner is SA Taxi, a group that has faced severe financial distress in recent years.

The additional call option allows WeBuyCars to increase its stake to a maximum of 51% for R15.7 million, exercisable between six and 12 months after the effective date.

Read: Transaction Capital confirms R510m sale of ‘non-core assets’

The purchase consideration payable for the put and call arrangements will be calculated with reference to the sustainable consolidated profit after tax of GoBid for the financial year ending on 30 September 2028, based on a price-to-earnings multiple of 8x.

The maximum consideration payable by GoBid in terms of the put and call arrangement is R1 058 400 000.

A ‘positive’ for shareholders 

Market commentator Finance Ghost noted in an investment note that the group has been operating in a period of significant disruption in the automotive sector.

While WeBuyCars’ share price suffered a sharp sell-off earlier, it has partially recovered and remains about 11% higher year to date.

Read: SA new vehicle sales hit decade high as affordability drives demand

He says the acquisition should be viewed positively for shareholders, as WeBuyCars is effectively buying into GoBid on a price-to-earnings multiple of about 7.8 times, lower than its own current valuation.

“This is a vertical integration play in which WeBuyCars wants more exposure to the full value chain,” he noted.

The transaction is classified as a Category 2 transaction under JSE Listings Requirements and does not require shareholder approval.

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