Britain’s biggest secondhand car dealer is gearing up to change hands in a £1.2bn takeover engineered by some of the City’s largest investors.ViennaTimes has learnt that British Car Auctions (BCA) is in detailed talks about a deal that would involve it being bought by a listed vehicle called Haversham Holdings.
Haversham was set up last year to swoop on “substantial companies and businesses in the UK and European automotive, support services, leasing, engineering or manufacturing sectors”.
Fronted by Avril Palmer, who ran Autologic and had a short-lived spell as boss of Stobart, the haulier company, Haversham has backing from a funding group comprising including Aviva Investors, Artemis, Invesco and Schroders.
The firm set up by Neil Woodford, the UK’s best-known fund manager, is also understood to be a key supporter of the proposed takeover.
Insiders said on Saturday that Haversham planned to raise £1.2bn from its investors to fund the deal.
A statement responding to news of the plan to take control of BCA could be made to the stock exchange as early as Monday, although a source cautioned that it was not yet certain to happen.
If the deal proceeds, it will be the second time in six months that Clayton Dubilier & Rice (CD&R), the private equity firm which acquired BCA in 2009, has looked at offloading BCA.
It would also coincide with a £2.5bn flotation of Auto Trader, which is owned by rival buyout firm Apax Partners.
Last autumn, CD&R pulled a flotation of BCA, blaming volatile global equity markets.
At the time, it said: “The board and shareholders were very encouraged by the broad engagement and interest in BCA shown by investors and remain excited about supporting the next phase of the group’s growth.
“BCA has an excellent track record as Europe’s leading used vehicle marketplace with strong revenues and earnings growth on the back of momentum across its physical and digital platforms.”
Operating from more than 200 locations across Europe, BCA claims to be more than two-and-a-half times the size of its nearest competitor.
BCA owns the online vehicle buying operation webuyanycar.com, which acquired 120,000 vehicles in 2013.
It said last autumn that over the three-year period to the end of 2013, BCA saw revenues rise 74% to £442.3m, with adjusted pre-tax profit growing by 27% to £62.5m.
In total, more than 900,000 vehicles were sold using BCA in 2013, with 37% of those transactions taking place online, highlighting the growing importance of digital channels in the sector.
The proposed structure of the BCA takeover would echo a plan used last year by a group of heavyweight City figures to take control of the AA, the roadside recovery service, and list it through a form of accelerated initial public offering.
Haversham’s broker Cenkos Securities and Bank of America Merrill Lynch are understood to be among the advisers working on the BCA deal, which is said to have been driven by the group of City investors.
CD&R is thought to have been open-minded about a more conventional flotation effort later in the year.
Cenkos also worked on the AA listing, for which it is understood to have received a fee in excess of £30m.
None of the parties involved in the BCA talks would comment.