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Trade Me, the auction website, agreed to acquire MotorWeb for $19.5 million in cash to deepen its motor vehicle offering by adding a business forecast to lift earnings in 2014.
Auckland-based MotorWeb had earnings before interest, tax, depreciation and amortisation of $3.7 million in the year ended March 31, and expects to lift earnings on the basis to $4.1 million in the current year. The purchase price is at a multiple of 5.3 times 2013 EBITDA and 4.8 times forecast 2014 earnings, Trade Me said.
MotorWeb packages and sells motor vehicle information and reports to finance companies, insurers, car dealers and the general public, providing a “one stop shop for the motor vehicle industry via its suite of more than a dozen products and services,” it said in a statement to the NZX. The business was founded by Patrick Costigan in 1997 and began trading in 2000, with operations in New Zealand and Australia.
“The MotorWeb business has a lot of potential to complement our existing Trade Me Motors business, and will give us the chance to broaden and deepen the products and data we provide in relation to motor vehicles,” said Trade Me chief executive Jon Macdonald.
Trade Me shares traded unchanged at $4.22 and have gained 6.8 percent this year.
(BusinessDesk)