Cazoo Agrees to Sell to Dan Och’s SPAC in $7 Billion Deal

Amy Thomson
·2 min read

(Bloomberg) -- Cazoo Ltd., the British used-car platform, agreed to sell itself to hedge-fund founder Dan Och’s blank-check company in a deal valued at $7 billion.

The combination with special-purpose acquisition company Ajax I will raise about $1.6 billion in proceeds for the company, including $805 million in a cash trust from the SPAC and another $800 million from Ajax’s sponsors, Cazoo said in a statement on Monday. London-based Cazoo will be listed in New York after the deal closes.

The company, which buys and restores used cars and delivers them directly to buyers, was valued at more than $2 billion after raising funds in October. Cazoo had been weighing an initial public offering after the successful listing of its German counterpart, Auto1 Group SE, which raised 1.8 billion euros ($2.1 billion) earlier this year.

The deal means Britain loses another unicorn to an overseas bidder despite efforts to reform London’s listing rules to make staying local more attractive for founders. More than $175 billion in takeovers of U.K. companies by foreign buyers have been announced in the past year, according to data compiled by Bloomberg. That’s up about 54% from the previous 12 months.

Chancellor of the Exchequer Rishi Sunak is weighing proposals that would give company founders greater control when they list their businesses in the City of London and would make it easier to create U.K. SPACs.

Online car sales have surged during Covid-19 lockdowns as traditional dealerships were forced to shut, and Cazoo said it expects sales to rise to nearly $1 billion this year, a 300% growth rate. Shares of Phoenix-based Carvana Co., which went public with a similar business model in 2017, have jumped more than 400% in the last 12 months, and it’s made its founders billionaires.

Cazoo was founded in 2018 by Alex Chesterman, a serial entrepreneur who previously founded property search website Zoopla and early streaming video and mail-order DVD rental service LoveFilm. Investors include BlackRock Inc., General Catalyst, D1 Capital Partners, Mubadala Capital, L Catterton and others.

(Updates with background on U.K. deals starting in fourth paragraph.)

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