Australian PE Quadrant buys online auction units of Eclipx for $42m

Australian private equity firm Quadrant has agreed to acquire GraysOnline and AreYouSelling businesses from fleet leasing and management group Eclipx Corporation for A$60 million ($42 million).

The acquisition marks the first investment from Quadrant Growth Fund, the 10th vehicle recently launched by the Sydney-based firm. Quadrant said in a statement that it will partner with the existing management team of GraysOnline in the deal.

The transaction was advised by KPMG Corporate Finance, Gilbert + Tobin and LEK.

The A$400-million Quadrant Growth Fund, which exceeded its original target of A$300 million, was closed within five weeks after it was launched, according to MinterEllison, the advisor for the deal.

The ninth fund, Quadrant Private Equity No 6, was closed at A$1.15 billion.

Grays is an online auctioneer incepted in 1922, snapped up by Eclipx for A$179 million in 2017. The fleet and equipment leasing firm is said to have sought divestment of the unit a couple of months earlier.

The sale of Grays and AreYouSelling “is an important early step” in Eclipx’ strategic refocus on its core fleet leasing and novated businesses, said Eclipx CEO Julian Russell.

“The sale contributes to the key objectives of our plan, materially reducing both group complexity and corporate debt. We are also seeing progress on the other non-core and sub-scale businesses,” he added.

Eclipx is also mulling divestments of Commercial Equipment Finance Australia, Right2Drive, and carloans.com.au.

Meanwhile, Justin Ryan, managing partner of Quadrant, said: “GraysOnline is one of the most significant e-commerce platforms in Australia with annual online sales valued at over A$600 million.”

Quadrant said, Grays had 45 million website visits and over 2 million registered users, selling over 1 million items last year.

We believe e-commerce platforms have great tail-winds in Australia as they continue to disrupt traditional business models and take increasing market share,” added Simon Pither, partner of Quadrant.

AreYouSelling, which was set up in 2007, will provide Grays with a significant supply of motor vehicles for resale, Grays CEO Chris Corbin said.