Aussie RV rental platform Camplify buys PaulCamper to further growth

Justin Hales, Chief Executive Officer and Founder of Camplify

Camplify Holdings Limited enters into an agreement to acquire a top German peer-to-peer RV rental marketplace, PaulCamper and raises $8.5 million in funding to expand operations, including an insurance business. As part of the transaction, Camplify will acquire the PaulCamper Insurance Broking division. PaulCamper Insurance Broker GmbH (PCIB) allows PaulCamper to operate as an insurance broker to customers in its current European markets.

Camplify intends to extend the PaulCamper Insurance Broker insurance products and reach to develop a suite of insurance products with a focus on existing markets with an intention to expand products and geographies. This is expected to drive take rate, and GP margin improvement. PaulCamper’s average brokerage commission on insurance sales is 23%.

What were the executives’ thoughts on the acquisition?

Camplify CEO and Founder Justin Hales commented: “This acquisition delivers Camplify a strategic and targeted growth opportunity in Europe, securing the largest key market, Germany. It provides Camplify with an excellent team of digital marketplace professionals based in Europe, allowing us as a group to optimise and look for expansion opportunities.”

“I am impressed by the PaulCamper operation and excited by the ability these transactions provide us to build our business and accelerate our pathway towards cashflow positive position with significant ability to grow revenue through vertically integrated products”

“We welcome PaulCamper RV owners, travellers and team members to the global Camplify community. As a group we share the vision of creating van life for all,” Justin Hales added.

PaulCamper CEO & Founder Dirk Fehse said: “The PaulCamper team, shareholders, and myself are excited about this new opportunity. In 2019 Justin and I met and discussed our shared vision and desire to create a community of RV owners who have a passion for sharing their RVs. As a business that has secured key markets in Europe, PaulCamper is pleased to take this next step and be a part of a global public company on the journey with Camplify.”

What are the specifics of Camplify’s transaction?

Acquisition Details

  • The Consideration payable by Camplify for the Acquisition is A$47.6ml (€30.88m)

  • Consideration consists of a combination of cash and scrip comprising:

    • A$1.8m1 (€1.18m) cash

    • 23,450,827 Camplify Shares (valued at A$45.8m2 (€29.62.m)) and is payable upon completion, estimated to occur in December 2022

  • The Acquisition is EBITDA accretive at 28.9% pre-synergies on a pro-forma basis for FY22

  • Consideration Shares issued to Sellers are to be subject to voluntary escrow from completion as follows:

    • Non-Management (14,719,113 Shares issued to approx. 20 investor shareholders in PaulCamper)

      • 15% released 2 weeks after H1FY23 release

      • 30% released 2 weeks after FY23 release

      • 55% released 2 weeks after completion anniversary

    • Dirk Fehse (7,383,299 Shares)

      • 3% released 2 weeks after H1FY23 release

      • 7% released 2 weeks after FY23 release

      • 90% released 18 months from completion

    • Franziska Schulz (other founder exiting the business) (1,348,415 Shares)

      • 10% released 2 weeks after FY23 release

      • 90% released 18 months from completion

  • The Acquisition is subject to:

    • shareholder approval to be sought at a Camplify General Meeting intended to be held by end of November 2022ASX Listing Rule 7.1 approval for the consideration Shares

    • ASIC relief being obtained in respect of the voluntary escrow arrangements

    • PaulCamper retiring its outstanding convertible instruments through the issue of shares

    • Other conditions customary for an acquisition of this type

    • An indicative timetable for the Acquisition is set out below.

Strong Strategic Rationale

  • Transformational Combination: The Acquisition will double the size of the Camplify business (customers, fleet size, bookings and gross profit). On a proforma basis for FY22 the consolidated group would have achieved GTV over A$111m and revenue of over A$26m

  • Cementing of Europe: beachhead acquisition enabling CHL to become a significant operator in Europe, including Europe’s largest RV market, Germany

  • Insurance Enhancement: PaulCamper’s insurance brokerage will immediately be accretive to margins and be a key growth engine for the business moving forward

  • Acceleration to Profitability: will accelerate Camplify’s pathway to cashflow positivity and profitability – on a pro-forma FY23 basis. PaulCamper is in an EBITDA positive position for CY22

Equity Raising Summary

Placement

CHL also announced the successful completion of an equity raise via a A$8.5 million institutional placement (Placement) comprising:

  • Tranche 1: A$3.5m placement consisting of 2,115,126 Shares

  • Tranche 2: A$4.9m placement consisting of 2,884,874 Shares, the issue of which is subject to shareholder approval to be sought at a General Meeting intended to be held by the end of November 2022

The Placement was conducted at an issue price of $1.70, per new fully paid ordinary share, representing a:

  • 15.4% discount to the last close on Friday, 14 October 2022; and

  • 11.7% discount to the 5-day VWAP of $1.93

Canaccord Genuity (Australia) Limited and Morgans Corporate Limited acted as Joint Lead Managers and Bookrunners to the Placement.

Funds raised from the Placement will be used for Camplify’s expansion as follows:

  • Provides Camplify with the opportunity to enhance insurance services and expand the insurance division.

  • Allows for higher margin in-house insurance products globally

  • Provides Camplify with the ability to accelerate TAP services in line with demand from government agencies, and private markets

  • Allows Camplify to realise the potential for revenue and cost synergies of the combined Camplify and PaulCamper businesses through product integration and scale of the combined business, accelerating Camplify’s pathway to profitability.

  • Provides working capital enabling the acceleration to cashflow positive position and profitability with significant ability to grow revenue through vertically integrated products

    • Build a dedicated team and portal to service business-to-business opportunities Camplify has via its Temporary Accommodation Program;

    • Achieve synergies with PaulCamper and improve revenue and EBITDA position by A$3.7m