Carlotz Going Public Via SPAC Joining Market With CarMax, Carvana, Vroom And Shift

New and used automotive sales have been transformed by several companies offering online and mobile options. A new entry will hit the public market with a SPAC merger.

The Deal: Carlotz announced it's going public via SPAC Acamar Partners Acquisition Corp ACAM. The deal values Carlotz with an enterprise value of $827 million.

Acamar Partners Acquisition Corp shareholders will own 27% of the company after the merger.

Shares will trade as LOTZ on the Nasdaq after the deal is completed.

Former General Motors GM CEO Rick Wagoner is part of the investors on the PIPE.

About Carlotz: Founded to transform the used vehicle industry, Carlotz offers the ability to buy, sell, trade automotive online or in-person. Carlotz is also the only company to offer a consignment to the retail sales business model in the industry.

Carlotz operates with eight hubs, covering all 50 states and has sold over 25,000 vehicles through its platform. 

Related Link: Carvana, Vroom Rally On Goldman Sachs Upgrade: The Bull Case For Auto E-Commerce

The Market: Over 42 million used cars are sold each year, with 12 million passing through a wholesale auction process. The total addressable market is worth $841 billion.

The used vehicle market is highly fragmented with peer to peer sales making up the largest percentage with 50%. The top 100 dealers make up only 6% of the market with other dealer groups accounting for 44%.

Carlotz has around 0.02% market share of the used vehicle sales market.

E-commerce sales in the automotive market is at 1% and has trailed the growth seen in other sectors. This comes despite 97% of vehicle purchases involving online research.

The growth of e-commerce for automotive has seen companies like Carvana Co CVNA, Vroom Inc VRM, CarMax Inc KMX and Shift SFT go public.

Financials: Carlotz estimates it will report $110 million in revenue for fiscal 2020. The company expects revenue to increase to $356 million and $945 million for fiscal 2021 and 2022, respectively.

The company expects to sell more than 80,000 vehicles in fiscal 2023.

Carlotz plans on opening additional hubs to cover more territory in the United States. The company believes it can hit a 0.15% market share in five years.

Comparison to Peers: Carlotz lists Carvana, Vroom and Shift as its main competitors. 

An expected compound annual growth rate of 145% from 2020 to 2023 for Carlotz is the highest of the four companies that have a mean of 66%. Carlotz ranks first with the lowest customer acquisition per unit and has the highest margin per unit sold.