Eagers Automotive unveils expansion with $1b CanadaOne Auto investment
Make us a preferred source
Make us a preferred source on Google
More news: Eagers Automotive has announced plans to expand into Canada through a $1 billion strategic investment in CanadaOne Auto, one of Canada's largest dealership groups.
The proposal will see Eagers acquire 65% of the shares in CanadaOne's holding company, with the remaining 35% stake held by entities associated with CanadaOne founder Pat Priestner.
The deal will be funded by $386 million in exchangeable shares issued to an entity controlled by Priestner, $108 million from existing debt and cash reserves, and a $502 million equity raise, including a $50 million placement to Mitsubishi Corporation.
Eagers will also use $70 million in proceeds from Mitsubishi's investment in its pre-owned car business easyauto123, announced this morning. Mitsubishi will acquire a 20% equity interest in the subsidiary.
What they said: “Our objective has been to pursue international growth in the best market with the best partner,” said Eagers CEO Keith Thornton.
“To us, the best partner needed scale through a track record of profitable growth, deep industry experience, extensive industry talent, high quality brand partnerships and a clear, material growth runway ahead of them.
“We believe we have found all these qualities in CanadaOne. CanadaOne’s founder Pat Priestner is a legendary entrepreneur in the Canadian automotive industry, and we are excited to work in partnership to accelerate all aspects of our combined growth strategy within the highly attractive and fragmented Canadian dealer market.”
Eagers Automotive enters trading halt ahead of acquisition announcement
The news: Eagers Automotive has entered a trading halt this morning, pending an announcement on a potential acquisition and equity raise.
The context: The automotive retail group said it is planning an equity raise via a strategic placement and accelerated non-renounceable entitlement offer.
It has requested that the trading halt remains in place until the earlier of the start of trading on Friday, and an announcement on the outcome of the institutional component of the entitlement offer.
