Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 53% More details

This SPAC Found the Right Fit in CarID

Stock MarketsOct 24, 2020 06:50AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Christiana Sciaudone

Investing.com -- This auto parts company has nary a warehouse in sight, and that's the plan. 

Onyx Enterprises connects customers -- mostly comprised of gearheads, for now -- to parts distributors via CARiD.com, an e-commerce company it owns and operates. Onyx is poised to go public in a merger with a special purpose acquisition company Legacy Acquisition Corp., which will change its name to PARTS iD, and move from specialty accessories and parts into repair and collision, a market 10-times the size of the one CARiD currently serves.

"There is a lot of competition in the market," said Nino Ciappina, interim general manager at Onyx, in a video interview. "What makes us different is the tech infrastructure, which we purpose-built over the past 10 years."

Here's what CARiD says sets it apart: The technology to source 17 million SKUs -- or stock keeping units, aka, individual products -- and growing. Compare that to rival Carparts.Com Inc (NASDAQ:PRTS), which has about 830,000 SKUs, according to its most recent quarterly report. The rival also boasts more than 840,000-square-feet of warehouse space, and growing.

CARiD's model does not require significant investments in distribution centers or inventory.

There are millions of parts and accessories given how many different models of cars are made each year -- this is known as fitment -- making servicing the market as a whole a challenge. 

"It creates an incredible amount of friction in this particular industry," Ciappina said. E-commerce solutions that exist aren't built for this kind of multidimensional industry. "We wanted to control the accuracy of the data."

After the reverse merger, CARiD will have up to $55.5 million of cash on the balance sheet to fund future growth and potential acquisitions. The implied pro forma enterprise value is $331.1 million.

CARiD, which estimates it will bring in $401 million in revenue this year, has more than 800 partners and 2,800 shipping locations in the U.S. 

"We can offer a wide selection and get goods to consumers relatively quickly, regardless of what you're ordering," Ciappina said. "Our business model is completely unique."

That was exactly what Legacy Acquisition was looking for. 

Legacy is led by a couple dozen former corporate executives and entrepreneurs, largely African-Americans, with years of experience at places like Procter & Gamble Company (NYSE:PG), Coty (NYSE:COTY) and Maytag.

Legacy Chief Executive Officer Edwin Rigaud said he has made it a point to get underrepresented groups involved in capitalism.  

"The more talent we can bring to Wall Street, the better off we all are," Rigaud said in the same interview. "There is African-American talent that's been sitting there waiting to do things, and not knowing exactly how to do it. This is my legacy."

Legacy went public in November 2017, raising about $300 million. 

"We have 25-plus experts who know how to look at an opportunity like this and really determine in depth to determine whether it's the right fit for the right company and whether it has growth potential,” Rigaud said. “There aren't other Spac teams that are comparable with the expertise that we have.”        

CARiD's market specialty equipment and accessories -- think, custom rims --  still represents the center of the business, but the focus is on building out product lines like repair that have a higher purchase frequency. After all, how often does one need new chrome rims?

“Our core objective is to win the automotive space, we know that's the much bigger opportunity," Ciappina said. “That is the quickest path to $1 billion in revenue.” 

CARiD sees a specialty equipment market of about $46 billion compared to more than $400 billion for the broader industry. That's a lot of a warehouse space -- if you need it.

   

 

This SPAC Found the Right Fit in CarID
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (4)
Josh West Midlands
Josh West Midlands Oct 24, 2020 1:46PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I like this SPAC, I like the reverse merger target. Their website is appealing to me and I like their business model. The question to myself is, shall I enter a long position now or after the election and ideally after the initial spike in price if the market reacts well to this acquisition.
shane Chowdhury
shane Chowdhury Oct 24, 2020 12:04PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I am investing in Aezs and Sonn in covid 19
Amir Kihan
Amir Kihan Oct 24, 2020 12:04PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Very nice
JeremyDjSkeezy Selph
JeremyDjSkeezy Selph Oct 24, 2020 12:02PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Earnings
Lloyd Faulk
Lloyd Faulk Oct 24, 2020 11:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
CARiD already has a dominate search engine presence in this niche, broadening that scope to a wider market will be a walk in the park.
Mike hawk
Mike hawk Oct 24, 2020 11:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
whats the spac they are going to use?
Marty Byrde
Marty Byrde Oct 24, 2020 11:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Mike Hawk, Legacy Acquisition Corp
CB Di
CB Di Oct 24, 2020 11:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
is this a buy?
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email