FDV looks to corner to car classifieds market in Morocco with new deal
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Online marketplace platform Frontier Digital Ventures (ASX:FDV) is doubling down in Morocco.
The company announced this morning that it will acquire the remaining 43.7 per cent of Moteur.ma — a classifieds site for new cars — that it doesn’t already own.
FDV will buy the interest for a fixed consideration of $US1.2m (~$1.6m), with the option for additional payments of up to $US300k if certain performance metrics are hit.
CEO Shaun Di Gregorio said the deal was a “natural progression” for the business following its recent acquisition of Avito, a separate classifieds platform in Morocco focused on used cars.
Last October, FDV completed a $92.6m share placement to institutional investors, which it used to fund a $56m deal for a portfolio of three separate companies across Colombia, Morocco and Tunisia.
At the time, the company described Avito as a leading Moroccan classifieds platform with “more traffic than any of the current operating companies in FDV’s existing portfolio”.
The move to acquire a full take in Moteur is reflective of FDV’s strategic goal to take a leading position in online classifieds business across different emerging markets.
“Achieving greater control of the operating companies across our portfolio is consistent” with that mission, Di Gregorio said.
“Control of both operating companies is expected to facilitate greater collaboration between Moteur and Avito, driving enhanced lead generation, greater marketing efficiencies (and) cost savings,” the company said.
Shares in the company held steady in morning trade around $1.50, a 20 per cent premium to the institutional placement price of $1.25.
“We expect this transaction will result in increased traffic to both platforms and help grow the customer base to achieve economies of scale,” Di Gregorio said.