Eurazeo sells 49% stake in Trader Interactive in $1.6bn deal

Alessia Argentieri
12 May 2021

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Eurazeo has sold a 49% stake in US-based marketplace Trader Interactive to Australian listed company Carsales for $624m.

The deal gives Trader an enterprise value of $1.6bn, which equates to 26.5x its $61m 2020 adjusted EBITDA.

Carsales has invested alongside existing owners Goldman Sachs (invested via West Street Capital Partners VII), Eurazeo North America, and Trader's management and employees, who collectively own the remaining 51% interest in the company.

Following the deal, Carsales has the possibility to exercise a call option to take control of the 51% remaining equity stake in the business.

With this sale, Eurazeo and its affiliates received pre-tax proceeds of approximately $280m, of which $190m are Eurazeo's proceeds. This represents a 1.5x return on their total initial investment.

Eurazeo invested in Trader, at the time known as Dominion Web Solutions, in June 2017, partnering with West Street Capital Partners VII, a fund managed by Goldman Sachs Merchant Banking.

Eurazeo's total investment in the company amounted to $226m in exchange for a 50% equity stake. Trader was the first deal inked by Eurazeo's medium-to-large buyout team in the US.

Under Eurazeo's ownership, Trader has reinforced its market position, strengthened its technology and data platform, and pursued a targeted M&A strategy.

Founded in 2010 in Norfolk, Virginia, Trader offers marketplaces for commercial trucks, recreational vehicles, and motorsports vehicles. Employing 380 staff, the business generated revenue of $123m and adjusted EBITDA of $61m in 2020.

Carsales will fund the acquisition of Trader with a combination of approximately $465m in equity raised in an entitlement offer and debt provided by upsizing the existing debt facility from lenders.

With this deal, Carsales intends to further build its international business and improve its industry diversification with exposure to new verticals in the US. Carsales also plans to support Trader's growth, leveraging its technology in other international markets.

Carsales is an automotive platform headquartered in Australia, with a growing presence in Latin America and Asia. It operates several marketplaces across the automotive and speciality vehicle segments and has partnerships with demotores.com in Argentina and EnCar in South Korea.