Transaction Capital, one of the best performing businesses on the JSE over the past ten years, continues to from strength to strength. In SA Taxi and WeBuyCars, the company has two great assets and is starting to benefit from the synergies created through vertical integration. David Hurwitz, the man at the helm of Transaction Capital, unpacked the results further on last night’s BizNews Power Hour. The company recently issued an announcement stating that it is seeking control of WeBuyCars, increasing its stake from c.50% to c.75% with the transaction requiring competition commission approval. – Justin Rowe-Roberts
David Hurwitz on WeBuyCars:
There was a structure in place from year one to year three, if certain conditions were met, that the founders would be able to sell more shares to Transaction Capital. We’ve been very impressed with the quality of the management and how robust this business is. Most importantly, we are very excited about the used vehicle sector with Covid giving it a tailwind. More people are trading down and buying second hand cars. Cars are the last large asset class to fall into e-commerce, which excites us.
On the rapid growth of WeBuyCars:
If you take a look at volumes pre-Covid, WeBuyCars were both buying and selling roughly 5000 cars a month. If you look now, that number sits around 8000. That is significant growth and it’s also come with a greater penetration of earning finance and insurance revenue, with margins staying stable. We now sell about 40% of all our cars online, which helps significantly in terms of turning our stock quicker.
Piet Viljoen on the WeBuyCars acquisition:
I think it’s a great transaction for both parties, which is the hallmark of a good deal. WeBuyCars got a fantastic partner and as David points out, finance and insurance is a key part of that business and if they can grow that faster it’ll add a lot of value.
- RBH to invest R500m in Transaction Capital, acquire further 12.4 million shares
- Transaction Capital expects sustainable growth after hefty restructure
- An insider look at the SA taxi industry from taxi financier Transaction Capital
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