Haversham Holdings agrees to acquire British Car Auctions after £1bn placing

AIM-listed Haversham Holdings has agreed to acquire the BCA Group, which owns and operates British Car Auctions and its WeBuyAnyCar.com website, and will rename itself as BCA Marketplace.

The proposed reverse takeover deal, which values BCA at roughly £1.2bn on a debt- and cash-free basis, will see Haversham place 685.7m news shares at 150p apiece to raise £1.03bn.

The cash consideration of the takeover will be funded from the proceeds of the placing and a new £200m term loan facility, with the share consideration of £104.3m to be satisfied by the issue of 69.5m new shares.

Institutional investors, including Aviva, Schroders and Woodford Investment Management, are reported to have promised to support the placing.

With a market cap of £1.17bn at the placing price and net debt on completion of around £126.8m, BCA Marketplace will apply to move up to the official list of the London Stock Exchange.

Haversham's executive chairman Avril Palmer-Baunack, former boss of Stobart Group, said the acquisition of BCA represented an important strategic step into the automotive sector, with BCA is a market-leading business with a unique position in the used vehicle market.

"Haversham's management team sees exciting growth opportunities in the changing European used vehicle market and plans to refresh BCA's strategy to enhance its strong growth record."

The enlarged group, which plans to adopt a progressive dividend policy targeting a payout ratio of 75% of adjusted net income, aims to grow by increasing volumes brought to the vehicle exchange, to expand into new geographic markets and to increase efficiencies.

BCA revenue is accelerating fast. The company generated £442.3m turnover in 2013 and in the half-year to 30 June 2014 made £458.4m revenues.

Adjusted earnings before interest, tax, depreciation and amortisation were £62.5m in 2013 and £43.4m in the subsequent six months.