Alamo Rent A Car and National Car Rental may find a happier home with their new owner, Cerberus Capital Management. The car hire companies, currently owned by ANC Rental, stand to benefit from increased investment and a more stable environment once they are distanced from the troubles of their parent.
Private investment firm Cerberus Capital Management is to buy almost all of ANC Rental's international assets and operations, including its European brands Alamo Rent A Car and National Car Rental, for $US230 million.
The sale concludes a lengthy series of financial troubles, which saw the rental giant file for Chapter 11 bankruptcy protection in the US in November 2001. Subsequently, it forged ahead with a protracted restructuring programme, which has now culminated in the current deal. The European operations did not enter bankruptcy protection with ANC.
The conditions of the deal include the investment group taking on $2 billion in debt for the purchasing and operating of the present vehicle fleet of ANC, as well as $60 million in non-vehicle debt. CCM will also be providing $150 million in investment and financial backing to further develop the acquired businesses.
ANC Rental, despite its troubles, is one of the largest car rental operations in the world, with 2002 annual revenues exceeding $2.4 billion. It has operations in 83 countries and an average daily fleet of around 375,000 vehicles.
ANC's international operations already enjoy considerable brand strength in their regional areas. However, they still stand to benefit significantly. The stabilised financial environment will allow both the Alamo Rent A Car and National Car Rental brands to remain and evolve as leading European players in the rental market.
This deal will effectively allow the European operations to continue as viable concerns and to further develop their market presence. By removing the uncertainty created by their troubled parent, the deal will allow these companies to receive the investment they need to compete in the ever more competitive car rental markets of Europe.
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