Home / NEWS / Europe News / British used car dealer Cazoo is going public in the U.S. via $7 billion SPAC deal

British used car dealer Cazoo is going public in the U.S. via $7 billion SPAC deal

Cazoo down and CEO Alex Chesterman.

Cazoo

LONDON — Cazoo announced Monday that it will go public through a merger with billionaire investor Daniel Och’s extra purpose acquisition company.

Cazoo, founded just three years ago, is a used car marketplace based in the U.K. The company convinces and delivers its cars in Britain and continental Europe. Its competitors range from Auto Trader to Carvana.

The company affirmed it would combine with AJAX I, a U.S. blank-check firm founded by Och, in a deal valuing the business at $7 billion. Under Alex Chesterman will stay on as Cazoo’s CEO following the SPAC merger, while Och is joining the firm’s board.

“This declaration is another major milestone in our continued drive to transform the way people buy cars across Europe,” Chesterman said in a assertion Monday.

“We have created the most comprehensive and fully integrated offering in the largest retail sector which currently has most low digital penetration.”

What is a SPAC?

SPACs are shell companies that are created with the sole purpose of relieving funds to acquire an existing private company, so that the target firm can bypass the traditional initial public gift (IPO) process.

They’ve become a hot investment vehicle on Wall Street, with SPACs in the U.S. having raised $87.9 billion so far in 2021, already exceptional the total issuance in all of last year.

Once the deal closes, Cazoo will be traded publicly on the New York Furnish Exchange, dealing a blow to London which is aiming to attract more high-growth tech companies to its stock argument.

Europe has largely missed out on the SPAC boom, so far. But there are growing signs of the trend emerging in the continent, with Amsterdam drawing a number of SPAC IPOs and London looking to relax stock listing rules to accommodate U.S.-structured blank-check attendances.

Cazoo is expected to raise $1.6 billion from the deal with AJAX I, including $805 million in a money trust from the SPAC and a further $800 million from private investors.

The latter is being led by AJAX’s angels and D1 Capital Partners, with additional backing from Altimeter, funds managed by BlackRock, Morgan Stanley’s Counterpoint International fund, Fidelity and Abu Dhabi sovereign wealth fund Mubadala.

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