Europcar to acquire low-cost rival Goldcar in $616 million deal
"We are well placed to have completed the bulk of our 2020 ambition in terms of acquisitions," Chief Executive Caroline Parot said in a statement, adding that the focus now shifts to integration and delivering expected synergies.
The proposed transaction is based on an enterprise value of 550 million euros ($616 million) and a post-synergy adjusted corporate EBITDA (earnings before interest, tax, depreciation and amortization) multiple of around seven times.
The deal is expected to generate close to 30 million euros in annual cost synergies by 2020 and is seen adding to its earnings per share from the first full year after the deal closes.
Europcar said it had agreed bridge financing with a large and international banking syndicate to support the deal, which is expected to close in the second half of 2017.
In order to maintain an "efficient and resilient capital structure," Europcar said it plans to raise equity in an amount representing up to 10 percent of its capital.
Following the acquisition and equity raising, Europcar expects to reach a corporate net financial debt to EBITDA ratio "comfortably" below 3 times by the end of 2017.
Spain-based Goldcar in 2016 generated full year revenue of around 240 million euros and an adjusted corporate EBITDA of circa 48 million euros. ■