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Australia. Melbourne, Monday, December 20, 2004. A management-led consortium has purchased Australia's Europcar franchisee and secured the Asia Pacific franchise rights from Paris-based car rental company Europcar International.
The master franchise is the largest of its kind ever granted by Europcar International and, in combination with the acquisition, creates a regional business with 800 employees, 13,000 vehicles and in excess of AUD$150 million in system revenues.
The newly combined group is to be named "Europcar Asia Pacific".
The transaction was announced in Melbourne today and includes the acquisition of existing Europcar franchises in nine countries including Australia, Indonesia, Malaysia, New Zealand, Pakistan, Sri Lanka and Singapore. It also includes master franchise rights for over 20 as yet unpenetrated countries including amongst others, India, The Philippines, South Korea, Taiwan, Thailand and Vietnam. Europcar operations will be established in those countries over a period of three to five years. The master franchise allows Europcar Asia Pacific to either sub-franchise or directly operate the businesses throughout the region.
The consortium also has an option for China, Hong Kong and Macau and will be working with Volkswagen and Accor, the global hotels group, to develop an entry strategy leveraging their strong existing businesses.
The Australian franchise was owned by Mario Salvo's CLA Holdings Limited.
The MBO (Management Buy Out) has been led by Australians Mr. Doug Hunt, who will take the position of Chief Executive Officer, and Mr. John Milhinch, who will become Europcar Asia Pacific's Franchising Director. Ten additional Europcar Australia senior executives will participate in the MBO.
The consortium's lead equity investor is Asia-based Navis Capital Partners, who will be the majority shareholder, accompanied by local equity investor, Perth-based Foundation Capital. Acquisition financing was provided to the consortium by National Australia Bank. "We will start with significant market advantages in terms of network, systems and buying power," said Mr. Hunt.
"The Australian consumer already enjoys Europcar's low rates and strong consumer orientation," he said. "We will build on this in a number of meaningful ways including exclusively carrying the Audi line of vehicles, giving seamless access to Europcar worldwide and developing new customer services throughout the region."
Mr. Hunt also said web-enabled reservations (www.europcar.com.au) and operational technologies developed by Europcar Australia for travel agencies and direct-to-consumer bookings would be accessed by the Asian businesses.
Senior Vice President of Europcar International's franchise network, Mr Rainer Vogt, said the Asia market was "relatively empty of sophisticated car rental companies." "We are very excited about teaming up with our new partners to continue to build on our strong existing business in the region. There is a very promising growth outlook for corporate and leisure business in the Asia region, compared to Europe, and we expect to have 25% market share in Asia within two years."
He said Europcar had grown from a European business to a global business with European heritage.
Director of Navis Capital Partners, Mr Rodney Muse said: "Europcar is a strong brand with compelling competitive advantages that will serve the business well as it expands in a region with good growth prospects. We are pleased to be investing with a strong management team and world-class strategic partners."
Purchase prices of the master franchise and operations in Australia and New Zealand are undisclosed.
Mr Salvo said that over 15 years he had grown the business from humble suburban beginnings to a national operator with a fleet of 7,000 vehicles. "I am happy to see the new owner take it a step further," he said. Mr Salvo said he was pursuing his other business interests.
Europcar International is the leading car rental company in Europe and is 100% owned by Volkswagen, the world's fourth largest auto manufacturer and the largest in China. Volkswagen recently announced a joint venture with Proton in Malaysia and has a worldwide-preferred operator arrangement with the Accor Group of Hotels, which formerly held a 50% stake in Europcar International. Europcar is the exclusive car rental partner of airlines Virgin Blue and Pacific Blue.
Navis Investment Partners was established in 1998 by former executives of The Boston Consulting Group in order to make control investments in the Asia Pacific region. Navis manages in excess of US$250 million and has offices in Bangkok, Hong Kong, Kuala Lumpur and Mumbai.
Foundation Capital was established in 1994 to provide private equity expansion and acquisition capital for Australian businesses. Foundation is based in Perth and currently manages A$115 million across three funds. The Foundation Millennium Fund, led by Foundation Director Mark Dutton, will make the investment.
Mr Douglas Hunt has been involved in the Australian automotive industry for 26 years. He was previously Regional Director Asia Pacific with Europcar International where he was responsible for establishing the operating regional franchises. He was also Deputy Managing Director of Europcar Australia during the establishment of the brand in 1999/2001.
Mr John Milhinch was previously General Manager of Investor Relations with Accor Asia Pacific Ltd and Tourism Asset Holdings. Prior to that he was Head of Marketing in investment management for Westpac Investments Ltd. For the past three years, he has also been President of the Royal Flying Doctor Service (SE Section) in Australia.
Issued for Europcar Asia Pacific by Graeme Willingham, Graeme Willingham Public Relations
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