Transaction Capital is in talks to buy a controlling share in WeBuyCars, the used-car selling and buying service. Transaction Capital owns minibus taxi finance group, SA Taxi, as well as a debt collection business.
Transaction Capital already owns 49.9% in WeBuyCars, which it bought for R1.8 billion in September last year. The company confirmed in a statement on Wednesday that it is in formal negotiations to buy another 25% stake in the holding company of WeBuyCars, which will push its shareholding to 74.9% stake.
The proposed transaction will give it control of the company.
Naspers planned to buy a stake of 60% in WeBuyCars last year, but the Competition Commission blocked the deal over competition concerns, given that Naspers owned OLX and AutoTrader
WeBuyCars, the biggest car-buying service in the country, was founded in 2001 by brothers Faan and Dirk van der Walt. Faan van der Walt used the money he saved from working as a teacher in the UK as the initial capital investment to launch the company.
The business enables the owners of cars, bakkies, busses, bikes, trailers, caravans and boats to get quotes for their assets online, and sends agents to visit their homes to buy these vehicles. WeBuyCars sells these vehicles through their showrooms and weekly online auctions.
In its results for the six months to end-March, also released on Tuesday, Transaction Capital already earned headline profit from R113 million from its stake in WeBuyCars, and the company. “We believe the exceptional growth prospects of this business will accelerate and support a sustainably higher growth trajectory for the group,” the company says.
The profit contribution from SA Taxi grew to R188 million, with gross loans and advances in this business increasing by 16% to R13.2 billion.
Its interim headline earnings grew by 38% to R257 million, and the company resumed its dividends.
The proposed WeBuyCars deal is still subject to Competition Commission approval.
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