Carly and Carbar Merge to Scale Australia’s Car Subscription Market
Carly Holdings Limited has agreed to merge its car subscription operations with Carbar Holdings in a $3.8 million deal, aiming to create a larger, more competitive player in Australia’s growing car subscription sector.
- Non-binding agreement to merge Carly’s car subscription business with Carbar
- Transaction valued at approximately $3.8 million, mostly in Carbar shares
- Merger expected to unlock significant synergies and accelerate growth
- Shareholder approval and regulatory conditions pending for completion
- Carly to retain shares in Carbar and continue as an ASX-listed entity
Merger Announcement and Strategic Rationale
On 14 February 2025, Carly Holdings Limited (ASX: CL8) announced a non-binding agreement to merge its car subscription operations with Carbar Holdings Pty Ltd. This move combines two of Australia’s pioneering car subscription platforms, aiming to consolidate market share and enhance operational scale in a rapidly evolving automotive technology sector.
The deal involves Carly selling all shares in its operating subsidiaries, Carly Car Subscription Pty Ltd, OneX Operations Pty Ltd, and ElevenX Operations Pty Ltd, to Carbar. In return, Carly will receive approximately $3.8 million in consideration, predominantly in Carbar shares, positioning Carly as a significant shareholder in the merged entity.
Financial and Structural Details
The consideration package includes about $160,000 in cash and $3.64 million in fully paid ordinary shares of Carbar, subject to working capital and other adjustments. Notably, Carbar will assume asset finance facilities totaling approximately $8.1 million from OneX and ElevenX, reflecting the scale of the combined operations.
iPartners, Carly’s financier, will receive roughly $2.77 million worth of Carbar shares in exchange for terminating an existing convertible note facility, effectively rationalizing Carly’s capital structure ahead of the merger. Carly itself will receive around $160,000 in cash and $870,000 in Carbar shares.
Market Context and Growth Prospects
The car subscription market in Australia has expanded rapidly since Carly and Carbar launched their services, offering consumers flexible alternatives to traditional vehicle ownership. Both companies provide all-inclusive subscriptions covering insurance, maintenance, and registration without lock-in contracts, appealing to a growing demographic seeking convenience and flexibility.
According to Carly CEO Chris Noone, the merger is a strategic step to achieve scale quickly, essential in technology-driven markets. The combined entity will benefit from immediate economies of scale and enhanced access to capital, accelerating growth and innovation across both brands’ complementary offerings, including Carly’s EV Trial and salary-packaged subscriptions.
Carbar CEO Des Hang highlighted the opportunity to deepen penetration into the novated subscription market, leveraging tax incentives and employee flexibility to expand the customer base. The merger is expected to create a more efficient platform capable of servicing diverse market segments.
Conditions and Next Steps
The transaction remains subject to several conditions precedent, including satisfactory due diligence, execution of binding transaction documents, regulatory approvals, and Carly shareholder approval under ASX Listing Rule 11.2. The companies aim to complete the merger by 31 March 2025.
Post-completion, Carly intends to maintain its ASX listing under a proposed new name, CL8 Holdings Limited, and hold its Carbar shares to benefit from future value appreciation. The company also plans to reduce overheads and explore new growth opportunities beyond the car subscription business.
Investors should note Carly’s securities remain suspended pending the lodgement of outstanding financial accounts and ASX compliance, adding an element of uncertainty to the timing of trading resumption.
Bottom Line?
This merger marks a pivotal step toward consolidation in Australia’s car subscription market, but execution risks and regulatory hurdles remain ahead.
Questions in the middle?
- Will Carly shareholders approve the merger and the proposed name change?
- How will the merged entity navigate regulatory scrutiny and ASX compliance issues?
- What growth strategies will the combined group pursue to capitalize on emerging novated subscription opportunities?