Importantly, the bankers said GCA Group expected 15 per cent annual revenue growth and 40 per cent EBITDA growth between 2022 and 2026, on a compound annual growth rate basis. The sharp pickup in revenue and earnings was put down to “resilient trading coming out of COVID with motors revenue acceleration underway”.
Combined, the three businesses were said to have more monthly visits than any other online classifieds company in Australia except REA Group, however operated at a lower total revenue per visit.
The bankers said GCA had 37 million monthly site visits in November last year, for $2 in revenue per visit. Domain had 30 million visits for $7 per visit revenue, while Seek and Carsales had fewer visits but much higher revenue per visit.
Potential Apax tie-up?
It’ll be interesting to see who ends up acquiring the business. PE firm Apax Partners has made a splash in the sector recently, buying both NZ’s TradeMe and more recently Pickles Auctions in Australia, while Quadrant Private Equity has a history in online auctions with Grays.
GCA’s owner, Adevinta from Norway, announced its decision to divest the Australian brands last November following its acquisition of eBay Classifieds Group. By May, it told investors the process was progressing well.
It’s a quick flip for Adevinta. The company backed Gumtree’s acquisition of Cox Media’s Carsguide and Autotrader in 2020.