India’s leading multi-brand certified used car company Mahindra First Choice Wheels.
The deal was announced by Mahindra & Mahindra, the parent company of Mahindra First Choice, which said the transaction occurred through “a secondary sale.”
HDFC, an early investor in Mahindra First Choice, sold its entire stake to Cox Automotive, which also bought some shares from AnPhi Advisors, a private equity investor.
The Mahindra & Mahindra statement did not disclose any financial details other than saying that Cox Automotive acquired “a significant strategic stake.”
Cox Automotive owns AutoTrader, the largest digital automotive marketplace in the United States, and Kelley Blue Book, a popular vehicle research platform.
Mahindra First Choice owns the Indian version of Kelley Blue Book, IndianBlueBook.com.
“There is an enormous global synergy building in this space,” Mahindra Chairman Anand Mahindra said, announcing the deal. “It is not a money-raising exercise. It is about bringing a strategic input. It is not about an IndianBlueBook versus Kelly Blue Book at some point of time. This is the might of the Kelly Blue Book being thrown behind the IndianBlueBook.”
In March, Mahindra First Choice raised $15 million from Valiant Capital, a hedge fund based in San Francisco by surrendering 13.36 percent stake.
The company, one of the few profitable used-car retailing businesses in India, reported a profit of nearly $290,000 on revenue of $6.6 million in fiscal 2015. Its revenue is expected to hit $10 million this year.
“Each of (Cox) products has scope for deepening and widening, the adjacencies,” Rajeev Dubey, CEO of the Aftermarket Sector at Mahindra who negotiated the deal with Mahindra, said.
Joe Luppino, chief corporate development officer at Cox Automotive, said his firm’s investment in Mahindra First Choice “furthers Cox Automotive’s strategic plans to create and grow used-vehicle marketsplaces,” and allows it “to partner with a company in the fast-growing Indian automotive market.”
Mahindra First Choice has close to 500 franchise outlets in nearly 250 towns and cities in India. It plans to double the number of outlets in the next three years.
Cox Automotive, which partners with more than 40,000 auto dealers, has nearly 30,000 team members in more than 200 locations around the world. It is a subsidiary of the Atlanta-based Cox Enterprises, Inc., which also owns Cox Communications and Cox Media Group. It has annual revenue of $17 billion.