Hopefully the longest, drawn out takeover of all time will finally reach a climax this year. Hertz’s buyout of Dollar Thrifty will probably hit 3 years before all is said and done.
Many people within the industry are sceptical about the deal that turns the car hire market from 4 players to just 3 but only time will tell. Today I have spent a few hours looking through the proposed deal and thought I’d pick out a few details that I think are interesting.
- $87.50 per share purchase price (all cash)
- P h Equity Value of $2.6 billion
- Corporate Enterprise Value of $2.3 billion
- 100% cash consideration
- No financing contingency – fully committed financing in place
- Tender offer
- Transaction close expected in Q4:12
- Antitrust clearance
- Hertz has reached a definitive agreement to divest Advantage
- Requires more than 50% of Dollar Thrifty’s outstanding shares be tendered
- Unanimously approved by the Boards of both companies
- Premium value in cash to DTG shareholders
- Highly attractive transaction for HTZ owners positive EVA
- Including impact of Advantage divestiture (~$30 million of Corp. EBITDA)
File tender offer materials with the SEC and launch tender offer Early September
Receive FTC clearance for the transaction1 Mid-October
Complete tender offer and purchase Dollar Thrifty shares Mid-to-late October
Complete short-form merger Mid-to-late October
|Corporate Revenue||$7.1B||$1.5B (60% Dollar/40%
|Avg. Corp. Fleet Units||615,600||107,154|
|Top 3 OEM Suppliers||GM, Nissan,Toyota||Ford, Chrysler, GM|
|Rental Car Locations||8,500||280|
|Markets Served||Premium Commercial, Premium Leisure,
Insurance Replacement, Commercial Leasing,
Monthly/Hourly car rental
|U.S.Airport Market Share||26%||11%|
The final piece of info that I thought was interesting was this “Hertz expects to be on credit watch initially, but does not anticipate credit rating downgrade”.
Some interesting stuff there and I’m sure other pieces of information will come to light, especially when the FTC release their own report detailing why they allowed the deal to go through, as always I’ll keep you up to date.
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