Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      MVNO boom is reshaping South Africa’s mobile market

      12 June 2025

      MultiChoice may unbundle SuperSport from DStv

      12 June 2025

      South African law is failing gig-economy workers

      12 June 2025

      MultiChoice’s TV empire shrinks – but its ‘side hustles’ are holding strong

      12 June 2025

      MultiChoice is bleeding subscribers

      11 June 2025
    • World

      Qualcomm shows off new chip for AI smart glasses

      11 June 2025

      Trump tariffs to dim 2025 smartphone shipments

      4 June 2025

      Shrimp Jesus and the AI ad invasion

      4 June 2025

      Apple slams EU rules as ‘flawed and costly’ in major legal pushback

      2 June 2025

      Mark Zuckerberg has finally found a use for his metaverse

      30 May 2025
    • In-depth

      Grok promised bias-free chat. Then came the edits

      2 June 2025

      Digital fortress: We go inside JB5, Teraco’s giant new AI-ready data centre

      30 May 2025

      Sam Altman and Jony Ive’s big bet to out-Apple Apple

      22 May 2025

      South Africa unveils big state digital reform programme

      12 May 2025

      Is this the end of Google Search as we know it?

      12 May 2025
    • TCS

      TechCentral Nexus S0E1: Starlink, BEE and a new leader at Vodacom

      8 June 2025

      TCS+ | The future of mobile money, with MTN’s Kagiso Mothibi

      6 June 2025

      TCS+ | AI is more than hype: Workday execs unpack real human impact

      4 June 2025

      TCS | Sentiv, and the story behind the buyout of Altron Nexus

      3 June 2025

      TCS | Signal restored: Unpacking the Blue Label and Cell C turnaround

      28 May 2025
    • Opinion

      Beyond the box: why IT distribution depends on real partnerships

      2 June 2025

      South Africa’s next crisis? Being offline in an AI-driven world

      2 June 2025

      Digital giants boost South African news media – and get blamed for it

      29 May 2025

      Solar panic? The truth about SSEG, fines and municipal rules

      14 April 2025

      Data protection must be crypto industry’s top priority

      9 April 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » News » Transaction Capital swoops on WeBuyCars

    Transaction Capital swoops on WeBuyCars

    By Duncan McLeod8 September 2020
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    After the Competition Tribunal blocked Naspers from acquiring a controlling 60% stake in specialist car-buying service WeBuyCars earlier this year, Transaction Capital has announced it is taking a 49.9% non-controlling stake in the company.

    Transaction Capital will pay a maximum of R1.84-billion for the stake, based on an enterprise value of WeBuyCars of R3.69-billion. The deal will see Transaction Capital paying R1.47-billion in cash plus shares worth R329.3-million (at R20/share). It also has the option to take a controlling stake at a future date.

    Transaction Capital will finance the payment of the R1.47-billion from a combination of existing cash resources (R900-million), existing debt facilities (R220-million) and by way of funding from WeBuyCars of R349.3-million, which will be facilitated through a subscription by WeBuyCars of preference shares in the subscriber.

    Transaction Capital will pay a maximum of R1.84-billion for the stake, based on an enterprise value of WeBuyCars of R3.69-billion

    On the first anniversary of the deal becoming effective, a further R40-million will be paid to WeBuyCars, made up of R20-million in cash and a further R20-million worth of newly issued shares in Transaction Capital.

    WeBuyCars buys and sells used vehicles and uses data- and technology-led e-commerce and physical infrastructure, supported by a national footprint that includes seven “vehicle supermarkets” and 19 “buying pods”.

    The company will continue to operate as an independent business, adjacent to Transaction Capital’s SA Taxi subsidiary. The investment establishes Transaction Capital’s third market vertical, the company said in a statement after markets closed in Johannesburg on Tuesday. “The investment carries no integration risk for Transaction Capital,” it said.

    ‘Exceptional opportunty’

    Transaction Capital CEO David Hurwitz said: “This investment is an exceptional opportunity to own a significant interest in a trader of used vehicles in South Africa, serving its clients through both an e-commerce and physical dealership infrastructure. The investment in WeBuyCars will be immediately value-accretive, converting interest income on our undeployed capital into higher-yielding operating earnings, accelerating Transaction Capital’s earnings growth rate. Options are in place, which if exercised and implemented, after regulatory approval, would result in Transaction Capital increasing its interest in WeBuyCars at a future date.”

    WeBuyCars is a technology-led business, with vehicle valuations determined using artificial intelligence and not individual buyer sentiment, Transaction Capital said in its statement. “Sellers can be certain of a fair price and immediate cash settlement on acceptance of the offer. Buyers are given independent vehicle condition reports and high-resolution photos to facilitate their purchase decisions.”

    The company buys about 6 000 vehicles a month on average from private consumers. The large used segment of the market, which conservatively trades more than one million used vehicles a year, has shown a compound annual growth rate of 1.7% over the last five years, Transaction Capital said. As the economic environment deteriorates as a result of government’s Covid-19 lockdown, coupled with the weak rand exchange rate, WeBuyCars expects the used car market to expand faster than the new car market.

    WeBuyCars CEO and co-founder Faan van der Walt said e-commerce is going to become increasingly important in the used car space. “Significant potential exists to drive penetration and uptake of our business-to-consumer offering, as online and e-commerce trading will drive higher levels of efficient and reliable service, while dissolving physical and geographic barriers. Over time, we expect that e-commerce in the South African vehicles market will gain traction.”

    On 27 March, the Competition Tribunal blocked Naspers’s OLX Group from acquiring 60% of WeBuyCars in a deal that would have been worth R1.4-billion. The Competition Commission, which investigates and assesses large mergers before referring them to the tribunal for a decision, recommended that the proposed transaction be prohibited as, it said, it was “likely to substantially prevent or lessen competition”.

    The merging parties opposed the commission’s recommendation and disputed its theories of harm to competition and its ultimate conclusions. They argued that the proposed transaction should be approved subject to certain conditions they had tabled, but their arguments were rejected by the tribunal.  — © 2020 NewsCentral Media



    David Hurwitz Naspers OLX OLX Group top Transaction Capital Webuycars
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleA quiet bitcoin boom is unfolding in Africa
    Next Article Volkswagen’s new electric car, the ID.3, panned

    Related Posts

    Amazon turns up the heat on Takealot

    3 June 2025

    Top executive steps down at Prosus

    3 June 2025

    Naspers helps boost JSE to record high

    30 May 2025
    Company News

    Building a cyber-resilient culture from the boardroom to the front lines

    12 June 2025

    How South Africa’s municipalities are finally getting smart

    12 June 2025

    Ransomware roulette: pay up or power through?

    11 June 2025
    Opinion

    Beyond the box: why IT distribution depends on real partnerships

    2 June 2025

    South Africa’s next crisis? Being offline in an AI-driven world

    2 June 2025

    Digital giants boost South African news media – and get blamed for it

    29 May 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.