Business

Cazoo boss hails next chapter as used-car website floats via Spac in New York

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ECH tycoon Alex Chesterman today hailed a “new chapter” for Cazoo as his online used car dealership went public in New York in a deal valuing the group at some $8 billion (£6 billion).

The US listing under the ticker “CZOO” came via a multibillion “Spac” merger with Ajax I, a blank cheque company backed by US hedge fund boss Dan Och.

The deal makes Cazoo the most valuable UK firm ever to launch on Wall Street, and could add $1 billion to Chesterman’s personal fortune.

Daily Mail owner DMGT holds around 132million shares in Cazoo – some 17% of the stock – which it bought for £117 million and is now worth north of £1billion.

Serial entrepreneur Chesterman was ringing the opening bell on the NYSE, becoming one of a handful of people to have done so at the stock exchanges in both London and New York.

Chesterman, below, founded online DVD rental firm Lovefilm which he sold to Amazon for £200 million in 2011, then launched property website Zoopla, which floated at £900 million in 2014.

He said: “Today is an important and exciting day for Cazoo as we enter the public markets. Since we announced the transaction earlier this year, we have continued to see record growth in our revenues and gross profit, have brought our UK vehicle reconditioning in-house, providing full control of our operations and logistics and have started buying and reconditioning cars in mainland Europe ahead of our launch later this year.

“And we have launched a fully integrated all-inclusive monthly car subscription service in the UK as well as our car buying service to source inventory directly from consumers.

“We remain obsessed with delivering the best car buying and selling experience for consumers across the UK and mainland Europe and the capital raised from this transaction will give us the resources to further accelerate our growth.

“Our world-class team has been further strengthened by our combination with AJAX and we could not be more pleased to partner with Dan and his team. The opportunities ahead of us are enormous and I am very excited about our next chapter and expect this combination to further drive our tremendous growth.”

Founded less than three years ago, Cazoo’s valuation has soared from $2.5 billion at a private fundraising in October 2020.

Critics have questioned the company’s hefty price tag but supporters say it reflects Cazoo’s rapid sales growth, fuelled by sponsorship deals with Premier League football clubs including Aston Villa and Everton.

Och, founder of AJAX, said: “We are very pleased to close the business combination with Cazoo and to partner with Alex and his outstanding team.

“By leveraging data and technology, Cazoo is delivering a superior car buying and selling experience in the UK and mainland Europe and building a strong competitive moat.

“With the large and fragmented nature of the market and incredibly low digital penetration, Cazoo has multiple levers to drive its growth and long-term sustainable shareholder value as it transforms the market.”

The launch paves the way for newspaper owner Lord Rothermere to take Daily Mail and General Trust (DMGT) – the company behind the Daily Mail, Mail on Sunday and Metro newspapers- private by helping to fund the £810 million planned takeover.

Paul Zwillenberg, CEO of DMGT, said: “ The listing marks another significant milestone for DMGT and we are delighted with the substantial capital appreciation on our £117m investment.”

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