Carbar heads to the ASX with $3.8 million takeover deal for Carly

Car subscription startup Carbar could be a little more public after nine years, having made a takeover bid for ASX-listed rival Carly.

The non-binding agreement to merge was announced just before market close on Friday. It will see Carbar acquire all of Carly Holdings Ltd (ASX: CL8) for $160,000 in cash and around $3.64 million worth of fully paid ordinary shares in Carbar. Carly’s operating entities are Carly Car Subscription Pty Ltd, OneX Operations Pty Ltd and ElevenX Operations Pty Ltd. 

Carly shares were sitting $0.013, for a market capitalisation of $3.489 million, having been suspended from trade since September 2024, awaiting financial results.

Its second largest shareholder is SG Fleet (ASX:SGF), which backed Carly shortly after its launch in 2019, as a subsidiary of ASX-listed Collaborate Corp, which changed its name to Carly in late 2020.

In its statement to the ASX, Carly said it had been reviewing growth and funding options for several months in conjunction with its financier, considering a number of options including refinancing, capital raising and several M&A deals.

The board went with the Carbar offer, saying it will “provide significantly more value for shareholders than other alternatives” and “accelerate the size and scale and unlock significant synergies” for the merged group.

iPartners has been Carly’s recent financier, and agreed to terminate an existing Convertible Note facility (a $2.76m liability on Carly’s accounts at 30 June, 2024), in exchange for around $2.77m worth of Carbar shares. Carbar assume the asset finance facilities of OneX and ElevenX, worth approximately $6.9m and $1.2m respectively, at December 31.

Carly has a fleet of more than 530 vehicles with an average subscription time of 5+ months, operating in Australia and New Zealand.

Carbar was founded in Melbourne in 2016 as a virtual car dealership and pioneered car subscriptions in Australia.

The startup raised $28.9 million three years ago in a round led by besieged insurer IAG and Seven West Media, and previously $16.8 million in 2019.

Startup Daily understands that last year Carbar bought back the equity stakes owned by IAG and Seven West Media.

Cofounder and CEO Des Hang said the merger brings scale and efficiency to both businesses .

“Through merging with Carly, we’re aiming to not only better service our existing customers, but to also push more aggressively into servicing the emerging novated subscription market,” he said.

“We strongly believe this is one of the best avenues for the car subscription offering, due both to the flexibility for employees and creating potential tax savings through current incentives.

“Carbar and Carly have complementary offerings, targeting different segments and channels of the market. Bringing the businesses together will leverage the advantages of each brand.”

Both  car subscriptions offer subscribers full access to the vehicle and include maintenance, roadside assistance, insurance and registration for a fixed weekly payment and without a lock-in contract.

Carly CEO, Chris Noone said “Carly’s core car subscription offering and innovative products including EV Trial, CarlyNow and salary packaged car subscription, supported by an exclusive ATO Product Ruling, complement Carbar’s car subscription and other offerings.”

Carly is hoping to remain on the ASX if the merger goes through and while the brand remains, will look to change its listing name to CL8 Holdings Ltd.

But CL8’s shares are currently suspended from trade under Listing Rule 17.5 for failure to lodge its Full Year Accounts for the financial year to 30 June, 2024, and the business also has to meet Listing Rules 12.1 & 12.2, which involve operations and financial condition in order to be reinstated to the ASX.

The two companies are working towards a completion date of 31 March, 2025.