Register Log-in Investor Type

HgCapital Trust to realise £59m from sale of Zenith to Bridgepoint

HgCapital, the Manager of HgCapital Trust, has announced that it has agreed the sale of Zenith, the largest independent vehicle leasing business in the UK, to Bridgepoint in a transaction totalling £750m. HgCapital says that sale of Zenith delivers a 2.9x investment multiple and a 46% gross IRR over the investment period. HgCapital Trust will realise cash proceeds of approximately £59.0m on completion of the transaction. This represents an uplift of £15.4m (35%) or 41 pence per share over the carrying value of £43.6m in HgCapital Trust’s NAV as at 30 November 2016.

HgCapital Trust says that, based on its 30 November 2016 reported NAV (including the impact of the revaluation of the carried interest provision) the pro-forma NAV of the Trust is expected to increase to £601.5 million (or 1,611 pence per share). The Trust’s says that its liquid resources, available for future deployment, are estimated to be £105m (17% of the pro-forma 30 November 2016 NAV). In addition, the Trust has access to a £80 million standby facility, which is currently undrawn.

Zenith is headquartered in Leeds and has full-service operations in both Solihull and Wokingham. It has over 500 employees and provides end-to-end automotive solutions focused on contract hire, salary sacrifice, fleet management and short-term hire services to customers across the UK. The company operates a fleet of c.85,000 vehicles and focuses on serving blue-chip customers, principally as sole supplier. Zenith was recently ranked 7th in the FN50’s list of the UK’s top 50 contract hire companies.

HgCapital initially invested in Leasedrive in December 2013 (with LDC retaining a minority stake in the business), subsequently completing the merger with Zenith in February 2014, and the business has operated as a single entity since March 2014. HgCapital says that the merger of Zenith and Leasedrive was driven by the highly complementary nature of the two businesses and the potential to create economies of scale and that a substantial part of the value created during HgCapital’s investment period has been driven by the close collaboration of Zenith’s management and the HgCapital team. It also says that Zenith has continued to deliver strong double-digit revenue and EBITDA growth over the past year (19% p.a. CAGR since March 2014) and the contracted nature of its business model means that a significant proportion of future growth is already underpinned by existing customer contracts.

HgCapital Trust to realise £59m from sale of Zenith to Bridgepoint : HGT

Leave a Reply

Your email address will not be published. Required fields are marked *

Please review our cookie, privacy & data protection and terms and conditions policies and, if you accept, please select your place of residence and whether you are a private or professional investor.

You live in…

You are a…