OLX Group, the Internet classifieds business in the Prosus stable, said on Monday that it will increase its ownership in online car marketplace Frontier Car Group (FCG) to become the company’s largest shareholder in a transaction worth as much as US$400-million (R6-billion).
FCG is a Berlin-based automotive marketplace founded in 2016. It develops and operates online and offline used-car marketplaces, with operations in 10 countries, and has raised $150-million of equity capital since its inception from OLX, TPG Growth and Balderton Capital.
Fully integrating the two companies will allow for faster expansion while improving the services available to buyers and sellers, OLX said. “Dealers will benefit from improved intelligence via a Dealership Management System, an enhanced resale capability via OLX, and provenance and pricing data via CarFax and Blue Book-style products. Sellers will also gain a new range of ways to sell their used cars in a trusted and transparent manner.”
OLX first invested $89-million in FCG in 2018, providing capital for the start-up to enhance its services and expand to new geographies, including the acquisition of WeBuyAnyCar in the US. Both companies currently work together in Latin America, Asia and Poland.
OLX Group will invest up to $400-million, comprising a primary injection of capital in FCG and the contribution of OLX’s joint-venture shares in India and Poland, as well as the acquisition of shares held by other investors, founders and management, subject to a tender offer process.
“Regardless of the uptake by investors in the tender process, the transaction will result in OLX Group becoming the largest shareholder in FCG. The deal will strengthen the already successful partnership between the two companies and help to accelerate FCG’s ranking to one of the top five car marketplaces worldwide.” — © 2019 NewsCentral Media
