WeBuyCars eyes R10 billion JSE listing

WeBuyCars plans to achieve a market capitalisation of between R8.7 billion and R10 billion when it is listed on the JSE’s main board on 11 April. 

The company revealed this in its pre-listing statement, released yesterday as part of its preparations for listing on the JSE. 

WeBuyCars has produced incredible growth since its founding in 2001, from two employees selling a handful of cars a month to 2,800 employees selling over 14,000 cars a month. 

Most impressively, its growth has been entirely organic – not once did the company raise debt to fund its growth. Rather, it relied entirely on the profits generated by the business.

WeBuyCars revealed in its pre-listing statement that it aims to list at a market capitalisation of between R8.7 billion and R10 billion.

WeBuyCars will have 413.7 million shares when listed, resulting in the listed share price being between R21.03 and R24.17 per share. 

Approximately 169.4 million shares will be held by non-public shareholders on the JSE, comprising approximately 41% of all issued shares. Public shareholders will hold the other 59% of the shares. 

The founders, Faan and Dirk van der Walt will retain 10% of the company’s shareholding after the listing. 

The company reported a profit of R778 million in its latest annual results. At these profits and anticipated market cap, WeBuyCars would be listed at a P/E ratio of 11.18 to 12.86 and a price-to-sales ratio of between 0.43 and 0.5. 

Since 2019, WeBuyCars has seen an average growth in its profits of 25% per annum and an average growth in sales of 38% per annum.

Following WeBuyCars’ listing on the main board of the JSE on 11 April, Transaction Capital will no longer own any of the company’s shares.  

The WeBuyCars shares held by Transaction Capital will be distributed to shareholders of Transaction Capital, leaving the company with no stake in WeBuyCars. 

Transaction Capital acquired a stake in WeBuyCars in 2020, buying up 49.9% of the company to take a non-controlling position for R1.8 billion. 

Since then, WeBuyCars has gone from one success to another, increasing its trading volume over ten times since the investment. 

However, Transaction Capital has come under immense pressure due to other parts of its business, particularly SA Taxi, struggling to recover post-Covid. 

This pushed the company into a corner, forcing it to sell off parts of its business to repay some of its debt.

As part of this, Transaction Capital announced it would unbundle its stake in WeBuyCars and list it separately on the JSE in order to reduce its debt and focus on its other businesses. 

The company aims to raise between R900 million and R1.25 billion from the unbundling. 

During the investor presentation, it was revealed that Transaction Capital would be left with no shares after the unbundling. 

The founders would be left with a 10% ownership stake – down from their current 25.1% shareholding. 

These changes are shown in the chart below, which outlines WeBuyCars’ shareholding structure before and after its listing.