O3, Novum to acquire Gumtree UK, Motors.co.uk

The carve-out is the last part of the divestments required for Adevinta to obtain approval from the UK Competition and Markets Authority (CMA) for its USD 9.2bn acquisition of eBay Classifieds.

Adevinta sold Shpock to Russmedia Equity Partners in June 2021 as part of this divestment plan, as reported.

The companies account for 7% of the consolidated revenues for eBay Classifieds Group and 4% for Adevinta, according to a statement.

eBay acquired Motors.co.uk from Cox Automotive for USD 93m in 2019, merging the platform with Gumtree UK.

The sale of Gumtree UK, which would include Motors.co.uk, began in June 2021, Unquote sister publication Mergermarket reported, with LionTree Advisors heading the process. Exponent and Inflexion had previously expressed interest in acquiring the business, Mergermarket reported, although both parties declined to comment.

Gumtree generated EBITDA of GBP 20m before the outbreak of the coronavirus pandemic, Mergermarket reported, noting that lockdown restrictions could have hit its performance. The business was expected to be valued in the GBP 400m-500m range.

Following the carve-out, Novum and O3 plan to support both companies with their growth, taking advantage of the flexibility in decision-making afforded by their establishment as independent entities. O3 intends to use its experience with consumer sector businesses, while Novum plans to deploy its expertise in carve-out situations, according to a statement.

Novum is deploying equity via Novum Capital Special Opportunities Fund II, and the acquisition of Gumtree and Motors.co.uk marks the first deal from the vehicle. The fund held a final close in March 2020 on EUR 150m; it generally invests in companies with EBITDA of at least EUR 5m and enterprise values of more than EUR 30m, deploying EUR 20m-30m in equity and making both buyout and growth deals.

Novum has traditionally invested in the DACH region and its acquisition of Gumtree UK and Motors.co.uk will be its first in the UK.

O3 is headed by CEO Jeremy Ozen. Prior to forming O3, he held roles at Goldman Sachs and Eastbridge Group. He founded out-of-home advertising industry software provider Vistar Media in 2012, selling the business for more than USD 100m.

Company
Gumtree UK and Motors.co.uk are online classifieds platforms. Motors.co.uk provides a platform for car dealers to reach customers to sell used cars, while Gumtree allows users to list and sell a range of items. They employ 249 staff and posted revenues of EUR 75m in 2020. Gumtree is based in Richmond in London, while Motors.co.uk has an office in Abingdon in Oxfordshire.

People
Adevinta – Rolv Erik Ryssdal (CEO).
O3 Investments – Daniel Ozen (president); Jeremy Ozen (CEO).
Novum Capital – Felix Homann (partner).

Advisers
Equity – Greenberg Traurig (legal); Baring Point (IT due diligence); Deloitte (debt advisory).
Vendor – LionTree Advisers (corporate finance); Skadden Arps Slate Meagher & Flom (legal); KPMG (financial due diligence).

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• Topics
• Buyouts
• Consumer
• UK / Ireland
• United Kingdom
• Carve-out