Shares of Cazoo Group Ltd (NYSE: CZOO) jumped nearly 5.0% this morning on news of an acquisition that will expand its footprint in the European used car market.
Cazoo to buy brumbrum in a cash and stock deal
In a press release this morning, Cazoo said it will buy brumbrum for €80 million ($90.24 million) in cash and stock. The leading Italian car retailer is a promising buy, considering its local market expertise, strong management, and capacity to refurbish 15,000 vehicles per year.
The deal with brumbrum will speed up Cazoo’s planned launch across Italy in 2022. In its latest reported quarter, Cazoo noted a massive 267% increase in revenue. The acquisition of brumbrum signals its commitment to future growth, says Jonathan Moyes, head of investment research at Wealth Club.
Cazoo’s transition from VCT backed private business to New York-listed titan left it with a tank full of cash to accelerate growth. The acquisition of brumbrum, after launches in France and Germany, and the acquisition of a leading Spanish player, shows the group is not hanging about.
Stock performance has been disappointing
On the flip side, Cazoo’s stock performance has been rather disappointing ever since it listed on the NYSE last August. Shares have tanked more than 50% over the past five months. Moyes added:
Cazoo shares have had a turbulent time since listing, but it’s not alone in the recent tech sell-off. If Cazoo can maintain its blistering expansion across Europe, it should help get the share price back on track for one of the more high-profile names in the UK’s growing herd of Unicorns.
According to the British online car retailer, the transaction is expected to close in the coming days.
La notizia Cazoo is buying this Italian car retailer to expand in Europe era stato segnalata su Invezz.