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Trade Me still on hunt after $19.5m MotorWeb purchase

Chris Keall
Thu, 12 Dec 2013

UPDATE: There's no end in sight for Trade Me's acquisition splurge.

CEO Jon Macdonald told NBR he's still on the lookout for prospects that are a good fit. "We'll continue to look out for well-run businesses," he tells NBR.

Trade Me's buying spree over the past 18 months has included vehicle lists aggregator site Autobase ($11.5 million), (for an undisclosed sum - indicating a single-digit million buy), insurance comparison website Life Direct (also undisclosed) and today's $19.5 million aquisition of Motorweb.

Mr Macdonald filled in a little more colour on the Motorweb buy. The site's revenue is around $8 million. It made a $2.3 million profit last year.

Motorweb staff will keep working in their own office, under their current management.

"We've found self-suffiencient entrepreneurial teams work really well, the CEO says.

LifeDirect was left to its own devices after Trade Me acquired it in August. That arrangement has worked well and is still in place, Mr Macdoald says.

Trade Me reported slowing profit growth with its full-year result.

Acquisitions are part of the plan to gee things up (along with a plan to boost new goods sales). As with the LifeDirect buy, Mr Macdonald sees the latest deal adding value in both directions. Trade Me will provide a larger sales channel for Motorweb; Motorweb data will up the engagement of Trade Me users.

Trade Me shares [NZX:TME] were down 1.18% to $4.18 in late trading.

Trade Me buys MotorWeb for $19.5m

EARLIER: Trade Me has entered into an agreement to buy Auckland-based business MotorWeb ( for $19.5 million - making the deal its largest-ever acquisition (its second-largest is Trade Me's $11.5 million purchase of vehicle listing aggregator AutoBase in April last year).

Motorweb lets car buyers check if money is owing on a vehicle, among other data. It offers a mix of free and paid information.

According to figures supplied by Trade Me, the privately-held MotorWeb made a net profit of $2.3 million and ebitda of $3.7 million in the year to March 31. Trade Me says MotorWeb is ontrack for ebitda of $4.1 million this year. No revenue figures were given.

"It seems like a smart move and at a very very good price," says entrepreneur Lance Wiggs, who advised founder Sam Morgan on Trade Me's sale Fairfax.

MotorWeb was founded by Patrick Costigan in 1997 and began trading in 2000. It is based in Auckland and operates in both New Zealand and Australia.
According to Companies Office records, the members of the Costigan family are the largest MotorWeb shareholders with a 61% stake.
Other founders and managers own smaller stakes, none above 12.71%.

The deal is conditional but expected to be completed later this month. The transaction is cash funded.

MotorWeb is an online business that packages and sells motor vehicle information and reports to finance companies, insurers, car dealers and the general public. It is recognised as providing a “one-stop shop” for the motor vehicle industry via its suite of more than a dozen products and services.

Trade Me CEO Jon Macdonald says MotorWeb was a great fit, given its great reputation and strong expertise in vehicle data. “The MotorWeb business has a lot of potential to complement our existing Trade Me Motors business, and will give us the chance to broaden and deepen the products and data we provide in relation to motor vehicles.”

Mr Macdonald says twelve MotorWeb staff would move across to join the Trade Me Motors team early next year. “We’ve had a longstanding business partner relationship with MotorWeb in place for many years, and we know they run an excellent business. It’s exciting to have them coming on board.”

The purchase is Trade Me's second in the information website space. 

In August it bought insurance comparison website Life Direct, and took onboard its 11 staff, for an undisclosed sum.

Trade Me shares [NZX:TME] were flat at 4.22% in early trading. The stock is up 3.43% for the year.

Chris Keall
Thu, 12 Dec 2013
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Trade Me still on hunt after $19.5m MotorWeb purchase