EDMONTON, AB – AutoCanada Inc., a leading Canadian automobile dealership group, recently announced a significant stride in consolidating its digital automotive sales sector. In a landmark move, the company confirmed receiving a $25 million investment from iA Financial Group for a minority stake in its innovative Online C2C Finance & Insurance (F&I) Business. This unit is focused on selling finance, insurance, and warranty products to private vehicle buyers on Kijiji’s online marketplace.
In a parallel development, AutoCanada has also acquired the remaining 19.1% minority interest in its Used Digital Division, previously owned by AutoCanada UD LP and certain other shareholders, including Paul Antony, AutoCanada’s Executive Chairman. This purchase, amounting to $23.9 million in cash and $7.5 million in share units, aligns with the company’s strategic focus on expanding its digital footprint in the used vehicle market.
Strategic Significance of the Investment
The investment by iA Financial Group, a prominent player in providing insurance and warranty products to dealerships, signals a robust confidence in AutoCanada’s business model. This investment is channeled into a newly formed subsidiary that spearheads the Online C2C F&I Business, enhancing AutoCanada’s service offerings in the online used vehicle market.
Stephen Green, AutoCanada’s Lead Independent Director, highlighted the transaction’s importance, emphasizing the enhanced alignment of management and shareholder interests. The move is expected to significantly ramp up operations in the Used Digital Kijiji Online platform, bolstering the company’s position in the digital automotive space.
iA’s Role and Long-term Collaboration
The collaboration between AutoCanada and iA is not new. Since 2018, iA has been the exclusive provider of insurance and warranty products for AutoCanada’s new vehicle dealerships. The renewed and extended agreement now encompasses AutoCanada’s used vehicle dealerships and the burgeoning Online C2C F&I Business, further solidifying this partnership.
Consolidation of UDLP Ownership
AutoCanada’s strategic consolidation of its Used Digital Division (UDLP) marks a significant milestone. Formed in 2020, UDLP has been instrumental in driving AutoCanada’s non-OEM used vehicle business, including an array of services from dealership operations to online vehicle acquisition solutions. The acquisition of the remaining UDLP shares from Paul Antony and other sellers not only simplifies the company’s structure but also strengthens its focus on digital growth in the used vehicle sector.
Looking Ahead
With these strategic moves, AutoCanada is poised to enhance its digital capabilities and market presence significantly. The company’s commitment to advancing its digital strategies, coupled with robust partnerships and consolidated ownership, positions it well for future growth in the evolving automotive industry.
For further details, AutoCanada has made a supplemental investor presentation available on its website.
