Avis Budget Group Announces Agreement to Acquire Avis EuropeBy Avis Budget Group, PRNE
Monday, June 13, 2011
PARSIPPANY, New Jersey and LONDON, June 14, 2011 -
– Purchase price of 3.15 pounds
Sterling per share in cash, or approximately $1.0 billion in
– Majority shareholder of Avis Europe has committed to support
– Acquisition unifies Avis and Budget brands globally under
single corporate ownership.
– Acquisition expected to be accretive on a non-GAAP adjusted
EPS basis, with significant operating synergies expected.
Avis Budget Group, Inc. (NASDAQ: CAR)and Avis Europe plc (LN:
AVE)have announced that they have reached agreement on the terms of
the acquisition by Avis Budget of all outstanding shares of Avis
Europe in exchange for 3.15 pounds in cash per Avis Europe share.
The acquisition is scheduled to close in October 2011,
subject to Avis Europe shareholder approval, court approval and
Avis Europe is an independent publicly traded company that
operates the Avis brand via a network of over 3,100 locations in
112 countries, through wholly-owned subsidiaries in 13 countries
and through license arrangement in an additional 99 countries.
Avis Europe also operates the Budget brand through 950
locations in 59 countries.
The terms of the transaction value Avis Europe’s ordinary equity
at approximately 635 million pounds, or approximately $1.0 billion.
Several of Avis Europe’s shareholders have already committed
to support the transaction. Avis Budget has received ‘hard’
irrevocable commitments from Avis Europe’s majority shareholder,
D’Ieteren, whose holdings represent approximately 60% of the share
capital of Avis Europe as well as from the directors on Avis
“This transaction represents an outstanding opportunity for Avis
Budget, and the acquisition of a business that we have long sought
to own,” said Ronald L. Nelson, Avis Budget Group Chairman and
Chief Executive Officer. ”The transaction re-unites the
global operation of the Avis and Budget brands under one corporate
umbrella, and is both financially and strategically compelling.
We expect the combination of our two companies will allow us
to more effectively serve vehicle-rental customers worldwide, and
to achieve operating synergies of more than $30 million a year.
In addition, the acquisition will give Avis Budget an
increased presence in rapidly-growing international markets,
including India and China.
“From a financial perspective, we expect the acquisition of Avis
Europe to be accretive to Avis Budget’s earnings per share on a
pro-forma basis with synergies, excluding any integration and other
one-time costs and the non-cash effects of purchase accounting.
Because Avis Europe and Avis Budget generally do not have
operations in the same jurisdiction, the acquisition is not
expected to face significant antitrust obstacles.”
Upon the acquisition becoming effective, the combined Avis
Budget and Avis Europe businesses will have annual revenues of
approximately $7 billion and owned or licensed operations in more
than 150 countries. Avis Budget expects to fund the
acquisition using a combination of its own cash resources, equity
funding through the potential issuance of up to $250 million of
Avis Budget common stock, and debt financing which has been
arranged by a syndicate of banks and/or proceeds from the issuance
of debt securities.
Pascal Bazin, Chief Executive of Avis Europe, stated, “Over the
last three years, we are proud to have delivered a successful
transformation and turn-around of our business, together with
successful geographic development in fast growing territories and
development of new mobility offers. Today’s announcement of the
recommended acquisition of Avis Europe by Avis Budget enables us to
provide both a compelling substantial immediate cash return to
shareholders and an exciting opportunity for Avis Europe’s
customers, employees, partners and licensees to benefit from the
many advantages that will come from being part of a combined Avis
Europe and Avis Budget Group with our two strong global brands,
increased scale and improved access to capital.”
The acquisition by Avis Budget (acting through its indirect,
wholly-owned subsidiary, AE Consolidation Limited) is expected to
be effected by means of a scheme of arrangement between Avis Europe
and its shareholders pursuant to Part 26 of the UK Companies Act
2006. The scheme of arrangement requires the approval of a majority
in number and 75% by value of voting Avis Europe shareholders and
applicable court approval.
Avis Budget noted that it has made progress in its discussions
with the Federal Trade Commission regarding its potential
acquisition of Dollar Thrifty Automotive Group, Inc. (NYSE: DTG).
While Avis Budget will continue to monitor the Dollar Thrifty
situation, the Company’s focus squarely will be on completing and
integrating the significant acquisition of Avis Europe.
Morgan Stanley and Citigroup are acting as financial advisors to
Avis Budget Group and Kirkland & Ellis is acting as legal
Investor Conference Call
Avis Budget Group will host a live conference call today,
Tuesday, June 14, 2011 at 8:00 a.m. ET to discuss the transaction.
Interested parties can listen to the conference call by dialing
(877) 478-9744 (within the U.S.), (949) 484-0289 (outside the U.S.)
using access code 75686689. The live webcast of the
conference call may be accessed through the investor relations
section on Avis Budget Group’s web site at href="www.avisbudgetgroup.com/">www.avisbudgetgroup.com.
A replay of the conference call will be available for 30 days
following the live conference call and can be accessed by dialing
(800) 642-1687 (within the U.S.), (706) 645-9291 (outside of the
U.S.), using access code 75686689.
About Avis Budget Group
Avis Budget Group is a leading vehicle rental operator in the
United States, Canada, Australia, New Zealand and certain other
regions through its Avis and Budget brands. Avis is a leading
rental car supplier positioned to serve the premium commercial and
leisure segments of the travel industry and Budget is a leading
rental car supplier focused primarily on more value-conscious
segments of the industry. Avis Budget Group is headquartered
in Parsippany, N.J. and has more than 21,000 employees. For
more information about Avis Budget Group, visit href="www.avisbudgetgroup.com/">www.avisbudgetgroup.com.
About Avis Europe
Avis Europe is a leading car rental company in Europe, Africa,
the Middle East and Asia, where it operates the globally recognised
Avis and Budget brands. Avis Europe operates the Avis brand
under licence from Avis Budget across four continents via a network
of over 3,100 locations in 112 countries, through wholly-owned
subsidiaries in 13 countries complemented by licence arrangements
in a further 99 countries. Avis Europe operates the Budget
brand (the licence in respect of which it acquired in 2003), across
three continents through over 950 locations in 59 countries. These
are predominantly franchise businesses with corporate operations in
Austria and Switzerland, together with a small number of locations
in France and the UK. For more information about Avis Europe,
This press release includes forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements are based on Avis
Budget’s and Avis Europe’s current plans, estimates and
expectations, and include statements about expected synergies and
benefits of a potential combination of Avis Budget and Avis Europe,
future expected accretion to earnings, geographic changes, and the
ability to obtain the necessary financing and the terms thereof.
There is no assurance that the transaction between Avis Budget and
Avis Europe will be consummated, and there are a number of risks
and uncertainties that could cause actual results to differ
materially from the forward-looking statements made herein.
These risks and uncertainties include the timing to
consummate the transaction between Avis Budget and Avis Europe and
the ability and timing to obtain required regulatory approvals,
Avis Budget’s ability to realize the synergies contemplated by the
transaction, Avis Budget’s ability to promptly and effectively
integrate the businesses of Avis Europe and Avis Budget and the
ability to complete and the timing and terms of any financing
required to consummate the transaction. In addition,
investors should take into consideration, with respect to Avis
Budget, those risks and uncertainties discussed in Avis Budget’s
Annual Report on Form 10-K for the fiscal year ended December 31,
2010 and Quarterly Report for the quarterly period ended March 31,
2011, including under headings such as “Forward-Looking
Statements,” “Risk Factors” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations,” and
other factors discussed in Avis Budget’s filings and furnishings
with the SEC. Investors and security holders are cautioned
not to place undue reliance on these forward-looking statements,
which apply only as of the date of this press release. Neither Avis
Budget nor Avis Europe undertakes any obligation to update its
forward-looking statements to reflect events or circumstances after
the date of this press release.
Contacts -------- Media Contacts: --------------- Joele Frank, Wilkinson Brimmer Katcher Andrew Siegel / Jennifer Friedman +1-212-355-4449 Financial Dynamics Jonathon Brill +44(0)20-7269-7170 Avis Budget Group John Barrows +1-973-496-7865 PR@avisbudget.com Investor Contact: ----------------- Avis Budget Group Neal Goldner +1-973-496-5086 IR@avisbudget.com
Tags: Avis Budget Group, England, June 14, new jersey, New Jersey And London, Parsippany