Transaction Capital plunges ahead of WeBuyCars listing

Transaction Capital has successfully closed its accelerated bookbuild, raising just over R900 million for the upcoming listing of WeBuyCars. The bookbuild was oversubscribed, demonstrating strong market appetite for the stock. Jonathan Jawno, CEO at Transaction Capital, expressed satisfaction with the results, highlighting the strategic importance of the transaction to reposition Transaction Capital. The R900 million raised in the bookbuild, at a price of around R1875 per share for WeBuyCars, is seen as a solid foundation for the company's entry into the market. The valuation of just under R8 billion signifies a strong starting point for future growth. While the bookbuild was oversubscribed, Transaction Capital opted not to accept all bids in order to strike a balance between price and quantity. Ultimately, the company aimed to raise between R900 million and R1.25 billion for Transaction Capital and its shareholders. By placing R900 million, they successfully reached R1.13 billion, comfortably meeting their capital objectives. As a result of the bookbuild, Transaction Capital's stake in WeBuyCars will be reduced to 61.5% from the previous nearly 75%. This reduction in stake was strategic, allowing the company to settle debts, meet commitments to partners, and fulfill obligations to WeBuyCars founders, totaling R1.6 billion. This transformative transaction not only improves the financial health of Transaction Capital but also positions WeBuyCars for future growth. Jonathan Jawno emphasized that the decision to fully unbundle WeBuyCars was to create a clean listing and avoid any market overhang. Transaction Capital's value creation has been through active engagement with WeBuyCars, and holding a smaller stake post-listing would not align with their strategy. Moving forward, Transaction Capital will focus on its two remaining businesses, SA Taxi and Newton. Despite recent challenges, particularly in the SA Taxi business, Transaction Capital remains bullish about the prospects of both SA Taxi and Newton. SA Taxi, a key strategic asset in the South African economy, faces challenges post-COVID but also offers significant market opportunities. With the freedom to focus on operations without the pressure of debt servicing, Transaction Capital is poised to drive value creation in its core businesses. The successful bookbuild for the WeBuyCars listing marks a significant milestone for Transaction Capital, setting the stage for future growth and value creation. Investors are eagerly anticipating the listing of WeBuyCars and the opportunities it presents in the second-hand car market.