LOGIN JOIN SHARECAFE SIGN UP FOR OUR NEWSLETTER ADVERTISE
share cafe logo  
 
SHARECAFE COMMENTARY

Carsales.com Doubles Down On South Korean Growth
BY GLENN DYER - 21/11/2017 | VIEW MORE ARTICLES BY GLENN DYER

Get More Commentary, Discussion & Market Information On -

CAR - CARSALES.COM LIMITED


Carsales.com says it book a massive book profit from a near quarter of a billion dollar deal to move deeper into the South Korean car sector.

The company told the ASX yesterday it had signed a memorandum of understanding with SK Holdings to buy the remaining 50.1% stake in South Korean joint venture Encar.com for about $244 million, before adjusting for working capital.

The deal was expected to be signed next month and completed in January. Carsales said the new investment is expected to be funded by new syndicated debt facilities .

Carsales.com bought a 49.9% stake in Encar.com in April 2014.

The online auto classifieds company's existing stake in the joint venture would be revalued for accounting purposes, creating a one-off non-cash gain of about $100 million.

Car Sales CEO Cameron McIntyre says “This acquisition is a significant milestone in carsales’ long term strategy to be the global leader in online auto classifieds. Encar.com has been one of our strongest performing overseas businesses and has continually delivered good revenue and earnings growth”.

“Our increased investment is testament to our confidence in the strength of the South Korean market and the long term growth potential of Encar.com” said McIntyre. “carsales and Encar.com will enjoy the benefits of a continued strategic partnership with the SK Group.”

The company anticipates the deal to be neutral for adjusted earnings in fiscal 2018 and will add to earning from 2019 and beyond.

Shares of carsales.com fell as much as 2% at the news but the loss eased and they ended the day down 0.3% at $13.55.



View More Articles By Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.



 

RECENTLY ADDED TO SHARECAFE


 › Marcus Today End Of Day Report
 › Thursday At The Close
 › Australian Wages Rising 2.1% Year-On-Year
 › Market At Midday On Thursday
 › Overnight: Wait A Minute
 › Opportunity Shines On Northern Star
 › Here's Why A Market Correction Could Be Over
 › These Fund Managers Want To Be Like You
 › FXL - Citi rates the stock as Upgrade to Buy
 › WES - Macquarie rates the stock as Outperform
 › FBU - Morgan Stanley rates the stock as Overweight
 › Shrinking Fairfax Eyes Consolidation
 › Quality Dents Fortescue Dividend
 › Fonterra Deal Sweetens a2 Milk Result
More ShareCafe   

GET THE SHARECAFE BREAKFAST BRIEFING


Delivered free to your inbox before the market opens each trading day. Sign up below +

SHARECAFE VIDEO


View More Videos