Carly Holdings and Carbar announce merger

SYDNEY: Carly Holdings Limited (ASX: CL8) announced today it has entered into a non-binding agreement to merge its car subscription business with Carbar Holdings Pty Ltd.

This strategic merger will unite two of Australia’s largest and original car subscription platforms.

The merger will be executed through the sale of all shares in Carly’s operating entities—Carly Car Subscription Pty Ltd, OneX Operations Pty Ltd, and ElevenX Operations Pty Ltd—to Carbar.

Post-merger, Carly will hold shares in Carbar, becoming the head company of the merged entity. The transaction is subject to Carly shareholder approval in accordance with ASX Listing Rule 11.2.

The deal is part of ongoing consolidation within the automotive technology and mobility sectors, driven by mergers and acquisitions. Carly’s Board believes this merger will accelerate growth, unlock significant synergies, and provide more value for shareholders compared to other options considered, such as refinancing and capital raising.

Carbar will acquire Carly’s entities for approximately $3.8 million, consisting of $160,000 in cash and $3.64 million in Carbar shares, subject to working capital and other adjustments. Carbar will also assume OneX and ElevenX’s asset finance facilities, which totaled approximately $8.1 million as of Dec. 31, 2024.

As part of the transaction, iPartners will terminate its existing Convertible Note facility in exchange for Carbar shares worth approximately $2.77 million and a waiver extension to enable the transaction. Carly will receive $160,000 in cash and $0.87 million in Carbar shares.

Carly CEO Chris Noone expressed enthusiasm for the merger, highlighting the benefits and flexibility of the car subscription model. He noted that the merger will provide immediate economies of scale and capital access to accelerate growth for both brands.

Carbar CEO Des Hang emphasized the potential for better serving existing customers and expanding into the novated subscription market, citing benefits such as flexibility for employees and potential tax savings.

The transaction is subject to the execution of binding documents, with no certainty of completion within a specific timeframe.

Post-transaction, Carly intends to hold its Carbar shares, remain ASX listed, and seek growth opportunities. Carly will apply the cash consideration to support operations while reducing overheads.

The company will also seek shareholder approval to change its name to “CL8 Holdings Limited,” contingent on the transaction’s completion. Carly’s securities are currently suspended from trading for failing to lodge its Full Year Accounts for the period ending June 30, 2024.

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