Automotive classified advertising business Auto Trader has agreed to acquire vehicle leasing marketplace operator Autorama in a deal worth up to as much as £200.0m.
Auto Trader said on Tuesday that the acquisition of Autorama will transform its existing leasing proposition and help meet the demands of a growing number of consumers considering leasing their next new vehicle.
The FTSE 100-listed firm stated there was “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.
Auto Trader will make an initial payment of £150.0m in cash, with a further £50.0m of deferred consideration to be settled in shares, subject to customary performance conditions 12 months after the completion date.
On 31 December, Autorama had £27.0m of gross assets and for the calendar year 2021, reported net revenues of £26.0m after selling roughly 14,500 vehicles and delivered an underlying loss of £6.0m, principally driven by marketing costs of over £9.0m.
As of 0845 GMT, Auto Trader shares were down 0.51% at 672.98p.