Germany-based auto marketplace AutoScout24 has agreed to acquire Canada-based Trader Corporation from private equity firm Thoma Bravo. The terms of the deal, which is due to close in Q4, were not made public.
With its foray across the Atlantic, AutoScout24 “extends its presence outside of Europe and strengthens its position as a leading global online automotive marketplace,” said the company.
“The transaction also expands AutoScout24’s service offering into automotive dealer software and lender solutions through Trader Canada’s leading offerings.”
Meanwhile, funds affiliated with AutoScout24 majority shareholder Hellman & Friedman (H&F) will make a “meaningful incremental equity investment” in AutoScout24, it added.
Based in Etobicoke, Ontario, Trader Corp. operates AutoTrader.ca — the leading auto marketplace in Canada by traffic — and two smaller sites, French-language AutoHebdo.net and Autos.ca.
The deal in quotes
“Trader Canada’s impressive long-term track record, clear position as Canada’s most important automotive marketplace and comprehensive expertise in dealer software and fintech solutions speak for themselves,” said Peter Brooks-Johnson, CEO of the AutoScout24 Group.
“This acquisition strengthens AutoScout24’s position as a leading global online automotive marketplace and will help accelerate the growth of both platforms. As a result, we will offer our customers, trade partners, OEMs and financing partners in Europe and Canada better services and more innovative solutions.”
“AutoScout24’s track record of success with their automotive marketplaces presents a perfect alignment with the Trader Canada business and our future long-term goals,” added Sebastian Baldwin, president and CEO of Trader Corporation.
“In addition to our marketplaces, which are the No. 1 most trusted choice for Canadian car shoppers, our market-leading software and automotive finance solutions businesses represent further opportunities for collaboration. We look forward to working together to continue strengthening Trader Canada’s market-leading position across the breadth of the Canadian automotive sector.”
Blake Kleinman, partner at H&F, said the majority shareholder had “come to appreciate the commonality, across all geographies, of the strategic product innovations required to maximize the efficiency of the car buying journey for consumers and dealers.”
“Bringing Trader Canada into the AutoScout24 family significantly enhances our ability to leverage our global scale and common technology platform to invest in innovation that will better serve consumers, dealers and our other partners.”
“The additional equity investment from H&F in this transaction demonstrates our long-term vision of building the leading global automotive classifieds platform.”
Holden Spaht, a managing partner at Thoma Bravo, said “Through the application of our software expertise and M&A strategy, we helped transform Trader Canada from an online automotive marketplace to a market leading platform of digital retail solutions for consumers and automotive dealers in Canada. We are confident that AutoScout24 is a great home for Trader Canada, and we look forward to following their continued success together.”
Peter Stefanski, a partner at the PE firm, added, “We are proud to have supported Trader Canada over the course of our investment, driving growth and innovation while creating a better experience for both dealers and car-buyers across all of Canada.”
Thoma Bravo seeking sale since start of summer
As we reported in June, Thoma Bravo had been looking to sell Trader Corp. since earlier this summer. The San Francisco-based investment firm was working with an adviser to find a buyer, anonymous sources told Bloomberg.
Trader Corp. could fetch at least CAD4.0 billion ($2.9 billion U.S.), including debt, the sources said at the time. Thoma Bravo acquired Trader Corp. in 2016 from Apax Partners for a reported price of CAD1.6 billion.
The PE firm focuses on technology, describing itself as one of the largest software-focused investors in the world. Active for over 40 years, it had approximately $142 billion in assets under management as of March 31. It invests in “growth-oriented, innovative companies operating in the software and technology sectors,” and has acquired or invested in more than 480 software and technology companies representing approximately $265 billion of value, according to company figures.
In May 2019, for example, it announced that it had acquired Autodata Solutions Group of London, Ontario, a provider of data and content, digital inventory marketing and software and applications to the auto industry.
Thoma Bravo has a history of retaining management at properties it acquires, and did so at both Trader Corp. and at Autodata.
In addition to Trader Corp., Thoma Bravo has also been weighing a sale of J.D. Power — a provider of automotive research and consumer information — Bloomberg reported in February. It said that Thoma Bravo was seeking $8.0 billion U.S. for the company.
Trader Canada dominates dealer-technology market
Founded in 1975, Trader Canada says its sites have 26 million monthly visits, more than 450,000 vehicle listings and 5,000 dealer partners.
Trader is also a major vendor of dealer software through subsidiary AutoSync and retail brands acquired from Cox Automotive in November 2022. These include KBB.com, Dealer.com, DealerTrack, VinSolutions and Xtime. These brands are still owned by Cox Automotive in the U.S.
Although Trader Corp. dominates the dealer-technology market in Canada, it faces a challenge from Cars.com, which acquired D2C Media — a Montreal-based tech vendor serving about 1,000 dealerships across the country — in November last year. According to Cars.com, it paid CAD105 million ($76.8 million U.S.) for the company.
AutoScout24 major force in European autos space
Founded in Munich in 1998 as MasterCar AG, AutoScout24 is a Top 3 vertical in several European countries, including Spain, Germany, Italy, the Netherlands and Belgium. It is also active in Luxembourg, France, Austria, Norway, Denmark, Poland, Hungary, Bulgaria, Czech Republic, Croatia, Poland, Romania, Sweden, Türkiye and Ukraine.
According to AutoScout24, it has approximately 2 million vehicle listings, more than 43,000 dealer partners and about 30 million users per month. The company has a staff of around 500 in Europe.
The AIM Group estimates that it lies 14th among the world’s top automotive marketplace companies by revenue. It is not directly related to AutoScout24.ch, which is owned by SMG Swiss Marketplace Group.
AutoScout24 has offered financing options for several years. It tied up with bank BDK in April to offer dealers financing options.
In June, it began to collaborate with Consors Finanz, a subsidiary of BNP Paribas and one of the leading providers of consumer finance in Germany and Austria.
As a result, partner dealers of the automotive marketplace can offer potential buyers financing from Consors Finanz, helping to generate additional leads for them and increase their revenue by arranging financial services.
