Carsome, the Malaysia-based car-selling marketplace, has announced that it is acquiring 19.9% of Southeast Asia-focused auto marketplace ICar Asia from Catcha Group, the international internet group founded by entrepreneur Patrick Grove. Catcha Group will become a shareholder in Carsome in exchange for the sale of its shares in ICar Asia.
Additionally, Carsome and Catcha Group have made a joint proposal to the independent directors of ICar Asia to acquire the remaining 80.1% from its shareholders for A$0.55 ($0.41 U.S.) per share in cash. The total transaction is estimated to be worth more than $200 million U.S., said Carsome in a statement, around $50 million more than what was offered for the business by China-based auto vertical AutoHome in October.
If the deal goes through, it will create an automotive marketplace giant across Southeast Asia, combining the leading regional car-buying marketplace and the leading c-to-c automotive marketplace in the region.
“Carsome and ICar Asia, combined, offers an integrated automotive ecosystem — for dealers to source, advertise and sell cars; and, for consumers to research, sell and buy cars — in a region that trades over $55 billion U.S. worth of automobiles annually,” Carsome said in a statement.
ICar Asia and Carsome are the respective leading entities in their particular business across Malaysia, Thailand, Indonesia and Singapore.
Carsome has stated that the proposed integration between Carsome and ICar Asia will target $1 billion U.S. in revenue for 2021, with around 100,000 cars transacted annually.
Carsome’s co-founder and group CEO Eric Cheng will lead Carsome Group as CEO.
“This is the first step toward consolidation to form the largest digital automotive group in Southeast Asia. We visualize a platform that could deliver end-to-end solutions for anyone — from searching a car to buying and selling, finance, insurance and after-sale services,” Cheng said in a statement.
“We are excited to have Patrick join us as he brings along two decades of tech entrepreneurship and capital market expertise. This transaction is an important part of our growth strategy to build the entire automotive ecosystem in Southeast Asia and part of how we are transforming the industry through trust, transparency and technology.”
Grove will be a strong asset to the team, experienced with helping lead operations across large international businesses.
“Bringing ICar Asia’s extensive traffic and dealer network in the region together with Carsome’s leadership position in automotive e-commerce is extremely powerful. We are excited to join Carsome as shareholders and work with Eric and his team to expand our leadership position and look forward to helping the combined business dominate the US$55 billion digital automotive space in Southeast Asia in the years ahead,” Grove stated.
Carsome has the ambition to become the first internet unicorn from Malaysia, and is considering an IPO in the U.S. through a reverse merger with a special purpose acquisition company.