Cazoo To Go Public On NYSE Through $7 Billion Deal With AJAX I

By Amit Chowdhry ● March 29, 2021
  • Cazoo Holdings Limited, the UK’s leading online car retailer with a major presence in Europe that makes buying a car as simple and seamless as purchasing any other product online, and AJAX I  (NYSE: AJAX), a publicly-traded special purpose acquisition company (SPAC) announced the signing of a definitive business combination agreement. These are the details.

Cazoo Holdings Limited, the UK’s leading online car retailer with a major presence in Europe that makes buying a car as simple and seamless as purchasing any other product online, and AJAX I  (NYSE: AJAX), a publicly-traded special purpose acquisition company (SPAC) announced the signing of a definitive business combination agreement. AJAX is a $805 million SPAC, founded by renowned US investor Dan Och in partnership with Glenn Fuhrman and a team of strategic advisors including the founders of Chipotle, Instagram, Square and 23andMe. Upon the closing of the deal, the combined company will be named Cazoo and will be listed on the New York Stock Exchange under the new ticker symbol “CZOO”.

Cazoo is known for pioneering the shift to online car buying in Europe and since being founded in 2018, has delivered over 20,000 cars to consumers across the UK who have embraced the selection, transparency, and convenience of buying quality used cars entirely online. Following the company’s recent acquisitions, Cazoo is also now Europe’s leading car subscription player with over 6,000 subscribers across the UK, Germany and France.

And Cazoo has developed a market-leading platform and brand with a fully integrated model where it owns and reconditions all its cars before offering them for sale on its website for either delivery or collection in as little as 72 hours. Already considered the leading online car retailer in the UK, Cazoo has begun its international expansion as it seeks to digitally disrupt the $700 billion European used car market which remains overwhelmingly offline.

And as one of Europe’s fastest-growing businesses, Cazoo expects to achieve revenues approaching $1 billion in 2021, a growth rate of more than 300% in its second full year of operations and has already built a team of over 1,800 across the UK, Germany, France and Portugal. The company is going to continue to be led by its Founder and CEO Alex Chesterman OBE, along with its talented management team. AJAX’s founder, Dan Och, will join the combined company’s Board of Directors.

This deal will support Cazoo’s mission to continue to transform the car buying experience across Europe, with the proceeds funding the further build-out of its brand and infrastructure. With its best-in-class and unique consumer proposition and fully integrated model, Cazoo is well-positioned to take advantage of the shift to online car buying and disrupt the huge and highly fragmented European car-buying market.

The deal values the combined company at a pro forma enterprise value of approximately $7 billion and a pro forma equity value of approximately $8.1 billion. And the transaction includes up to $805 million AJAX cash in trust, assuming no redemptions by AJAX shareholders, and an $800 million fully committed PIPE at $10 per share led by the AJAX sponsors and D1 Capital Partners and joined by new and existing investors including Altimeter, funds & accounts managed by BlackRock, Counterpoint Global (Morgan Stanley) and Fidelity Management and Research Company LLC, Marcho Partners, Mubadala Capital, Pelham Capital, Senator Investment Group and Spruce House Partnership. The AJAX sponsor team led by Dan Och, and including Glenn Fuhrman, Steve Ells, Jim McKelvey, Kevin Systrom and Anne Wojcicki have personally committed $200 million to the PIPE.

Assuming no redemptions and after accounting for cash proceeds payable to the existing Cazoo shareholders, the transaction will deliver approximately $1 billion in gross cash proceeds to the combined company, enabling Cazoo to further build out its brand and infrastructure and supporting Cazoo’s mission to continue to transform the car buying experience across Europe. Assuming no redemptions by AJAX shareholders, Cazoo’s existing shareholders will hold approximately 79% of the shares of the combined company on closing.

The boards of directors of Cazoo and AJAX have unanimously approved this transaction. And the deal requires the approval of the shareholders of AJAX and Cazoo, and is subject to other customary closing conditions, including the receipt of certain regulatory approvals. The transaction is expected to close in the third quarter of 2021.

KEY QUOTES:

“This announcement is another major milestone in our continued drive to transform the way people buy cars across Europe. We have created the most comprehensive and fully integrated offering in the largest retail sector which currently has very low digital penetration. This deal will provide us with almost $1 billion of further funds to fuel our growth and I am delighted to be partnering with Dan and his team at AJAX to rapidly expand and deliver the best car buying experience to consumers across Europe.”

— Alex Chesterman OBE, Founder & CEO of Cazoo

“We are incredibly excited to have the opportunity to partner with Alex and the exceptional team at Cazoo. Alex has proven to be one of Europe’s most successful serial entrepreneurs and we are proud to be supporting the growth of this world-class team, brand and platform. With their constant focus on innovation, data and customer satisfaction, I have no doubt that Cazoo is going to continue to lead the way in this massive, untapped market opportunity and am looking forward to joining the Board of Cazoo and working with Alex and his team.”

— Dan Och, Founder of AJAX

“As a long-term investor in Cazoo and believer in its leadership team, we are pleased to continue supporting Cazoo’s growth as a public company. While Cazoo had many options for funding its strategy, its decision to merge with AJAX and join with Dan Och and other renowned partners was a good one that will have positive implications for the company and its future.”

— Daniel Sundheim, Founder & CIO of D1 Capital Partners

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