Auto Trader completes acquisition of Autorama at nearly 16 times gross profit

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Thu, 23 June 2022 | BUSINESS SALE

Auto Trader has completed the acquisition of new vehicle rental platform Autorama, in a deal that could reach £200m. Initial consideration of £150 million was paid on completion, with additional deferred consideration of £50 million, which is subject to certain performance conditions.

If the full £200m were to be paid, it would be just over 15.8 times Autorama’s gross profit of £12.6m for the year ending December 31, 2020, generated on turnover of £63.7 million. In those results, the company reported an after-tax loss of £8.1million.

Autorama, which operates as Vanarama, was founded in 2004 by Andy Alderson (pictured above) as a used vehicle dealership, before moving into B2B commercial vehicle leasing in 2007. The company has become one of the UK’s leading rental dealers, selling over 120,000 vehicles to date.

The company’s digital platform aggregates rental offerings from a range of lenders and OEMs (original equipment manufacturers). Auto Trader says the acquisition of Autorama will help it “establish itself as a leading market for new car rentals.”

Auto Trader adds that the leasing market “is set to benefit from the growth of electric cars, the entry of new manufacturers into the UK market, lower take-up of company car schemes and a move towards new models. of digital distribution”.

After the acquisition, Auto Trader expects Autorama to generate net revenue of between £18m and £21m for the remainder of the financial year. However, he expects the business to make an operating loss of around £5-7million.

Commenting on the acquisition, Auto Trader CEO Nathan Coe said, “We are delighted to have completed the acquisition of Autorama, which will transform our leasing proposition and help us meet growing consumer demand. to lease, rather than own, new cars.

“Combining Auto Trader’s large consumer audience with Autorama’s digital platform and operational capability complements our strategy to bring more of the car buying journey online.”

Learn more about the factors driving mergers and acquisitions in the automotive sector.

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