Car dealer BCA Marketplace to join London listing parade
By Simon Jessop
LONDON (Reuters) - Used car dealer BCA Marketplace hopes to raise at least 200 million pounds by selling new shares in a London stock market listing, it said on Monday, joining a flurry of flotations on Europe's biggest bourse.
The firm, which matches up wholesale buyers and sellers of used cars and also runs the retail-focused webuyanycar.com website, said it planned to list in November despite some concerns the stock market is starting to sag.
"We take the view that the market, to some extent, will be what it will be," said Chief Executive Jon Olsen. "We have a great story to tell the investor community and therefore we believe we will achieve a fair market price for this business."
The new shares would be sold to institutional investors, BCA said in a statement, and the money raised, along with a new debt facility and available cash, used to repay outstanding borrowings.
By paying down existing third-party debt, the company would achieve a more sustainable capital structure for the longer term, with a net debt to adjusted underlying earnings ratio of around 3 times, the company said.
"It's a question of reducing leverage down to a level that is more commensurate with a listed business," Chief Financial Officer Simon Hosking told Reuters. Three times earnings before interest, tax, depreciation and amortisation seemed to be a level investors were "broadly happy with", he added.
The primary listing would help repay around 180 million pounds of existing debt, all of which was third-party debt unconnected to existing shareholders, and the scale of any secondary listing -- where existing shares could be sold -- would depend on demand but likely be small.
"The majority of current investment will remain in the business post-listing," said Hosking.
JPMorgan and UBS would act as joint global co-ordinators, sponsors and bookrunners on the deal, with HSBC, Jefferies and Numis Securities as joint bookrunners, BCA said.
After listing the company, which also offers services around the sale of cars such as cleaning, inspection, delivery and finance, said it would aim for a dividend pay-out of between 30 percent and 40 percent of adjusted net income.
In a trading statement BCA, whose main rival is unlisted U.S. company Manheim, said it had posted a strong performance in the first half of the year, driven by 10 percent growth in vehicles sold, and that the trend had continued since then.
The company's Vehicle Remarketing Division helped with the sale of over 900,000 vehicles in 2013 between more than 55,000 buyers and 1,000 vendors in 2013, it said, of which 37 percent was online.
Growth in the broader market was also strong, it said, with more than 30 million used vehicles sold in 2013 in the European markets where it operates, and growth in demand to use vehicle exchanges such as those operated by BCA of 9 percent in core markets the UK, France and Germany.
Citing data from OC&C Strategy Consultants, BCA said exchange volumes were set to grab a bigger slice of the market, with volumes forecast to rise 6 percent a year between 2013 and 2017.
(Editing by Greg Mahlich and Mark Potter)
