SYDNEY, AUSTRALIA: The Market Herald Limited (ASX:TMH) is acquiring Gumtree Australia, Autotrader Australia and Carsguide as part of the digital classified advertising expansion.
Acquiring Gumtree, Carsguide and Autotrader
Gumtree is an iconic brand and marketplace used by 1 in 3 Australians and 10 million households every month. With over 100,000 new listings every day, 3.5 million registered users and 6 million app downloads, for 15 years Gumtree has been the number 1 place where Australians buy and sell.
Gumtree Autos, Carsguide and Autotrader are together the number 2 automotive marketplace in Australia. The number of car listings and site traffic are nearing parity with the number 1 automotive marketplace. Further product development will deliver an end to end digital car buying experience for millions of users.
Jag Sanger, Managing Director, The Market Herald commented: “The Gumtree, Carsguide and Autotrader platform is one of the largest digital communities in Australia. Gumtree is part of life for millions of Australians, and there are many opportunities to add more products and services, creating and end to end digital offer. In addition the Gumtree, Carsguide and Autotrader proposition is the leading challenger to the $6bn marcap automotive listings incumbent and there are many opportunities to close the gap”.
Expanding The Market Herald Fancy, a luxury editorial led listings platform for high value products and services
The Market Herald will accelerate its organic investment in its luxury and lifestyle brand: Fancy. Fancy is integrated with The Market Herald, but has its own identity, team and proposition.
The Market Herald Fancy serves an on-platform audience of 2.56 million affluent consumers, and its luxury and lifestyle content reaches a further 332 million off platform every month. The Market Herald Fancy’s luxury editorial and listings platform includes fashion, travel, lifestyle, jewellery, art, property and boating.
Jag Sanger, Managing Director, The Market Herald commented: “We serve an affluent and engaged readership, and they are key markets for luxury goods. Luxury goods retailing is changing. As luxury brands embrace digital they are looking at new channels to engage with their customers. Globally, business focused newspapers, such as the Financial Time and The Wall Street Journal are benefiting from this shift and are developing new digital offers to serve this market. This will become an important part of our editorial and video streaming offer.”
The Market Herald serves an affluent audience, with an estimated average annual household income of $247k7 and the upper quartile of its audience holding investable assets of $276bn7. This is 10% of the estimated Australian High Net Wealth (HNW) asset pool of $AUD2.74 trillion.
However despite – or because – of the wealth and financial sophistication of this segment, 40%4 of this asset pool does not use financial advisers. Instead this HNW segment is self directed, meaning they research and act on information they find themselves.
The Market Herald will serve this valuable self directed segment of HNW investors by launching The Market Herald Family Office. This will first be an editorial and streaming video offer covering the products and services that self directed HNW investors need to manage their wealth. This includes estate planning, tax, philanthropy, wellness, art and alternative asset consultancy and other services.
Second this will be a marketplace of service providers wanting to connect to this audience through listings, streaming segment sponsorship and transactional offers.
Jag Sanger, Managing Director, The Market Herald commented: “We already operate one of the largest7 digital communities of self directed wealth in Australia, and they use our platforms to research and make investments. Now with The Market Herald Family Office we can help them research how to manage their wealth and connect them with service providers wanting to reach them. This is a unique wealth management marketplace and will be a key part of our offer”.
Acquisition and organic initiative funding
The proposed acquisition of Gumtree Australia, Carsguide and Autotrader Australia will be funded by a vendor loan of approximately $60.1m and an Entitlement Offer which will raise approximately. $26.55m.
The vendor loan note is extended by Adevinta Oak Holdings B.V. as vendor of Gumtree Australia, Carsguide and Autotrader. It is subject to standard terms and is to be repaid within a twelve month period commencing on the date of the Acquisition.
The Entitlement Offer is partially underwritten to 80% of the approximate $26.55m raising by Capital Investment Partners Pty Ltd (CIP), an entity associated with non-executive director Mr Gavin Argyle.
Organic initiatives in the next 12 months and some committed investment in the current financial year will be approx. $14.7m comprised mainly of people and some capital costs.
Investor should also review the accompanying investor presentation for additional information about the enlarged entity, terms of the acquisition and financial benefits of the acquisition.
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