(Alliance News) - Used car buying platform Cazoo Holdings Ltd will become a publicly traded company after agreeing a takeover by a New York-listed special purpose acquisition company.
London-listed Daily Mail & General Trust PLC, the newspaper publisher which has a roughly 20% stake in Cazoo, may pocket USD1.35 billion as a result.
The deal with publicly-traded vehicle AJAX I gives Cazoo a pro-forma enterprise value of USD7.0 billion and a pro-forma equity value of USD8.1 billion. Each Cazoo share would be valued at USD10.00.
"This announcement is another major milestone in our continued drive to transform the way people buy cars across Europe. We have created the most comprehensive and fully integrated offering in the largest retail sector which currently has very low digital penetration. This deal will provide us with almost USD1 billion of further funds to fuel our growth," Cazoo Chief Executive Officer Alex Chesterman said.
DMGT said it may receive USD1.35 billion on closing, though added that the final figure may be lower should AJAX shareholders make redemptions.
"It is likely that DMGT will receive some cash proceeds on closing, but the amount will depend on a number of factors, including redemptions by AJAX shareholders, if any, as well as DMGT's election and those of other shareholders with respect to receipt of cash consideration. Lock-up restrictions are expected to apply for five to six months after the transaction closes," DMGT said.
The Daily Mail owner invested in Cazoo through its dmg ventures capital arm.
Back in October, it topped up its stake after taking part in Cazoo's GBP240 million fundraise.
The deal marks another occasion when a high-profile company has bypassed a traditional stock market float and instead merged with a SPAC. These are investment vehicles that raise money on stock exchanges and then invest in other companies or mount reverse takeovers.
Shared office space firm WeWork agreed a similar deal last week Friday and earlier in March, Bloomberg reported Buzzfeed Inc was in talks to merge with a SPAC.
By Eric Cunha; ericcunha@alliancenews.com
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