WeBuyCars has announced the strategic acquisition of a 49% stake in the digital vehicle auction platform GoBid for R376.8 million, a move designed to tighten its grip on the vehicle resale value chain. The transaction gives WeBuyCars significant exposure to the disposal of accident-damaged, salvage, and lower-quality vehicles, aligning with its objective to service the entire South African vehicle market.
The deal structure includes call and put options that could see WeBuyCars increase its shareholding to a controlling 51% within a year and potentially acquire the remaining shares over time. GoBid operates an online auction platform that WeBuyCars already utilises to sell stock that does not meet its retail quality standards, such as non-runners and write-offs. By acquiring a major stake, WeBuyCars will now capture more of the value generated from this disposal channel.
The acquisition involves WeBuyCars purchasing 40% of GoBid from Taximart (beneficially owned by the financially distressed SA Taxi group) and a further 9% from other shareholders. This vertical integration play allows WeBuyCars to gain more control over the full lifecycle of the vehicles it sources.
Market Sentiment
Market reaction to the deal has been analytical, with commentators viewing it as a strategically sound move for WeBuyCars. The acquisition is seen as a vertical integration play that gives the company valuable exposure to the full vehicle value chain. From a financial perspective, the deal is considered positive for shareholders, as WeBuyCars is effectively acquiring its stake in GoBid at an attractive price-to-earnings multiple of approximately 7.8 times, which is lower than its own current market valuation.
While the WeBuyCars share price saw a minor dip on the day of the announcement, it remains up for the year, having recovered from an earlier sell-off. The transaction, classified as a Category 2 deal, does not require shareholder approval and is seen as a smart, accretive use of capital that strengthens the company’s long-term competitive position in a rapidly evolving automotive sector.
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