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AutoCanada receives $25M investment for online marketplace digital division
Plant Magazine
Business Operations Automotive Manufacturing Transportation AutoCanada digital division investment online marketplacesAutoCanada Inc., a multi-location North American automobile dealership group, announced the investment by iA Financial Group (iA) of $25 million for a 10 per cent equity interest in AutoCanada’s business unit that will sell finance, insurance and warranty products to buyers of private owner-sold vehicles on Kijiji’s online marketplaces (the “Online C2C F&I Business”).
AutoCanada has also announced the purchase of the minority 19.1 per cent interest (UDLP Minority Interest) in its Used Digital Division that is owned by AutoCanada UD LP (UDLP) from Paul Antony, the Executive Chairman of the company, and others for $23.9 million in cash, funded from the proceeds of the iA investment, and $7.5 million in share units issuable to Paul Antony.
The share units will be settled through the delivery of AutoCanada shares acquired in the market. The former UDLP Minority Interest holders have agreed to use the after-tax cash proceeds to purchase AutoCanada shares in the market.
“This transaction increases the Company’s ownership in the Used Digital Division, while also removing any possible conflicts with other business segments and aligning management with shareholders ahead of a material ramp in the Used Digital Kijiji Online operations,” said Stephen Green, Lead Independent Director of AutoCanada. “The Board looks forward to working with Mr. Antony and the rest of the team at AutoCanada to advance the Used Digital business, which we believe has significant potential.”