E Automotive, an online vehicle auction marketplace, is planning to go public on the Toronto Stock Exchange. The company has not announced a date or set a price for the offering.
UPDATE 20/10/2021: On October 20, E Automotive filed an amended prospectus stating plans to secure gross proceeds of approximately $125 million, at an offering price between $19 and $23 per common share.
The offering is being made through a syndicate of underwriters led by Canaccord Genuity Corp., CIBC Capital Markets and National Bank Financial Inc. as lead underwriters, and Scotiabank, Eight Capital, ATB Capital Markets Inc. and Laurentian Bank Securities Inc.
In its preliminary prospectus, E Automotive said the offering will be used to fuel its expansion, including into the United States market, and for working capital.
In order to expand, the startup said it will have to hire new staff, advertise more to drive sales efforts, and invest further in its product development and technology.
E Automotive indicated in its prospectus that it may expand its business through acquisitions or investments in other complementary businesses, products, or technologies. But the company has no agreements related to such acquisitions or investments at this time, according to the prospectus.
In its prospectus, the company said that pending its use of the net proceeds of the offering, it could invest the net proceeds in short-term, investment-grade, interest-bearing investments, or hold them as cash, “which will have the effect of strengthening our balance sheet.”
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The company’s platform provides auto dealers with access to a wholesale auction marketplace
where they can purchase or sell vehicles to other dealers, as well as access software solutions to support dealers’ digital retailing and inventory management.
The startup claimed that over 115,000 vehicles, totalling $1.6 billion CAD ($1.3 billion USD), were bought or sold through its digital platform over the last 12 months, connecting over 8,4003 marketplace participants. E Automotive said that it currently has approximately 1,000 unique dealers using our subscription retail solutions.
In the last year, E Automotive has made two acquisitions, with one pending. In January, it acquired the outstanding membership interests of Digital Auctions for approximately $9 million CAD ($8 million USD).
E Automotive acquired all the outstanding shares of ESP – an offline auction provider – and TradeHelper – an online auction program – for approximately $32.5 million CAD ($25.8 million), 55,555 common shares of E Inc., and an earnout with a maximum payout of $4 million CAD ($3.2 million USD) in August.
The startup is expecting to close the acquisition of Rolo Trucking in the fourth quarter of 2021. Rolo Trucking is a Canadian company operating a fleet of trailers with a specialization in the movement of vehicles.
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