CARSALES is on an expansion trail again, aiming to buy the DeMotores online automotive classified websites in Argentina, Colombia and Chile for $A6.7 million.

Australia’s biggest online car classified website reported this week that it has entered an agreement with one of Argentina’s biggest media companies, SA LaNation, to buy DeMotores.

It will add to carsales.com’s interests in similar online sites Chileautos (83.3 per cent ownership, Chile); WebMotors (30 per cent ownership, Brazil); SoloAutos (65 per cent ownership, Mexico); SK Encar (49.9 per cent, South Korea); and iCar Asia (19.9 per cent, Thailand, Malaysia, Indonesia).

Carsales director international, Paul Barlow, said the inclusion of DeMotores with the existing investments in the region made it the biggest online automotive classifieds network across Latin America.

“This investment further capitalises on our work rolling out a Spanish language version of our world-class technology in Mexico and Chile and helps us continue to benefit from economies of scale in Latin America,” he said.

Mr Barlow said the Argentinean market was attractive because of its positive transition under new president Mauricio Macri; the country’s high GDP per capita; and its large 41.45 million population. New car sales in Argentina rose in 2016 to 2.2 million vehicles, up more than 10 per cent compared to 2015.

Outgoing Carsales CEO Greg Roebuck said: “This acquisition provides Carsales with a significant presence in one of the most attractive markets in the region.”

“It also cements ChileAutos’ clear number one position in Chile.”

Mr Roebuck, in his annual report statement for 2016, said the aim of having investments in markets where Spanish is the common language “has meant we’re comfortable investing substantial resources in making our platforms multi-lingual”.

He said this would provide opportunities for Carsales to expand its business “such as our award winning app and lead/inventory management systems” across the world.

Carsales has agreed to pay $A6.7 million subject to purchase price adjustments; including for working capital. It said it intends to fund the acquisition from existing cash reserves and existing syndicated debt facilities and added that it is not expected to affect the company’s earnings this financial year.

The acquisition is expected to be finalised by the end of March 2017 and is expected to have an immaterial impact on immediate earnings.

 

By Neil Dowling