Online car market Auto Trader invests in Chinese Biauto Holdings

Chinese Internet content and marketing services group Bitauto Holdings Limited (NYSE:BITA) on Friday said US digital automotive marketplace operator AutoTrader Group Inc would invest USD58.5m (EUR45.3m) to buy some 21.8% in it.

The purchase of 9m Bitauto ordinary shares will be carried out in a private transaction agreed between AutoTrader and some of the Chinese firm’s existing pre-IPO shareholders.

At the same time, a pre-IPO Bitauto shareholder has agreed to sell around 2.4% in the company to a senior management team, including chairman and CEO William Bin Li, president Jingning Shao, CFO Andy Xuan Zhang and senior vice president Weihai Qu. The executives will use a four-year term loan from AutoTrader to finance the USD6.5m stock purchase, the target firm said.

Bin Li welcomed AutoTrader as a strategic investor in Bitauto, saying that the US’s company’s position as the largest digital automotive marketplace in the country makes it an ideal partner for Bitauto. The cooperation is seen to generate substantial opportunities for both companies in the long term, Bitauto’s CEO added.

For its part, AutoTrader sees the move to align it with China’s top online automotive site, while making its portfolio of companies stronger and creating a base for its future growth in emerging markets, CEO Chip Perry commented.

Pending customary closing conditions, both transactions are expected to close in November.

Based in Atlanta, Georgia, AutoTrader operates the and Kelley Blue Book websites, offering content and information of the car buying process. It also has a software solutions business supporting dealers in appraising, managing, pricing and marketing their inventory.