(Reuters) - Private equity firm Apax Partners LLP is exploring a sale of Trader Corp which could value the Canadian provider of advertising for automotive dealers at more than $1.5 billion, including debt, according to people familiar with the matter.
Apax is working with investment banks that include Goldman Sachs Group Inc (GS.N) on a sale process for Trader, the people said on Thursday. Trader will pursue an initial public offering if the acquisition offers it receives do not meet Apax's valuation expectations, one of the people added.
Trader generates more than $100 million in 12-month earnings before interest, taxes, depreciation and amortization, the people added, asking not to be identified because the sale process is confidential.
Apax and Goldman Sachs declined to comment, while a Trader spokeswoman did not immediately respond to a request for comment.
Based in Etobicoke, Ontario, Trader offers digital advertising tools to automotive dealers and also runs online car marketplaces, including autoTRADER.ca, which generates 14 million visits each month, according to Trader's website.
Trader has a well recognized brand in Canada, good subscription-based recurring revenue, and strong profit margins, Moody's Canada Inc said last September.
Apax acquired Trader in 2011 from media and marketing company Yellow Media Inc for C$745 million ($574.8 million).
Another online auto classifieds company owned by Apax, Auto Trader Group Plc (AUTOA.L), was one of Britain's largest IPOs when it floated on the London Stock Exchange last year, raising about 1.6 billion pounds ($2.3 billion). Apax sold its remaining shares in that company earlier this month.
Reporting by Greg Roumeliotis in New York and Liana B. Baker in Los Angeles; Editing by Andrew Hay