Deal in Focus: TDR in record-breaking €3.7bn LBO for LeasePlan

TDR Capital's €3.7bn purchase of LeasePlan – awaiting approval by the European Central Bank and the Dutch Central Bank – is expected to be finalised towards year-end. It will see LeasePlan owners Volkswagen and Fleet Investments fully divest the business via the sale of their respective 50% stakes.

Investors participating alongside TDR include Dutch pension funds such as PGGM; Danish pension fund ATP; Singapore's sovereign wealth fund GIC; Luxembourg-based Luxinva; and Goldman Sachs's merchant banking subsidiary, among others.

Sources close to the situation told unquote" that none of the aforementioned investors will have control over the consortium, as they will each secure a minority stake in the newco LP Group BV. The group will fund the takeover via an equity injection representing an estimated 50% of the €3.7bn purchase price. The remainder will be financed with a €480m mandatory convertible note and a €1.55bn cash-pay debt package supplied by an international syndicate of lenders.

TDR's investment is understood to have come via the firm's third buyout fund, which hit its €2bn target at final close in April 2014.

In the driver's seat
Established in 1963, LeasePlan provides operational fleet management and driver mobility services to clients ranging from SMEs to multinationals. Headquartered in Almere, the Netherlands, the business manages 1.42 million vehicles across 31 additional countries including the UK, France, Germany, the US and Brazil.

With a workforce of 6,800 people, 85% of whom are based outside the Netherlands, the company has €19.7bn in total assets and reported a €372m net profit in 2014.

The fleet operator had been controlled by Volkswagen since 2004, when the car manufacturer led a consortium of investors that fully acquired the business from ABN Amro Bank for an estimated €2bn. Meanwhile, Fleet Investments, the investment arm of German banker Friedrich von Metzler, picked up its 50% stake in LeasePlan in May 2009.

According to market sources, the acquisition process was kick-started by the consortium as it approached LeasePlan's owners 18 months ago. Although neither Volkswagen nor Fleet Investments were initially keen on a sale, the suitors' terms persuaded them to allow the consortium access and due diligence processes were initiated, unquote" understands.

Road to success
According to unquote" data, the takeover of LeasePlan represents the fourth largest private-equity-backed buyout to ever take place in the Benelux region. Top spot goes to the acquisition of Luxembourg-based telecommunications equipment business Intelsat for $16.6bn in June 2007, followed by the purchases of Dutch information group The Nielsen Company and silicon systems specialist NXP Semiconductors for €8.7bn and €8.3bn, respectively.

The LeasePlan buyout remains the largest recorded by unquote" so far in 2015, and the first to break the €3bn market since January. It is the latest in a wave of mega-deals witnessed in Europe in recent weeks, with €40.7bn worth of private-equity-backed buyouts inked in Q2 alone – including Apollo's €2.9bn acquisition of French bottle producer Verallia in June.

People
TDR Capital – Manjit Dale, Thibaut Large, Jonathan Rosen, Diarmuid Cummins

Advisers
Equity – JP Morgan (Corporate finance); Goldman Sachs (Corporate finance); ING (Corporate finance); Linklaters (Legal); Simpson Thacher & Bartlett (Legal); De Brauw Blackstone Westbroek (Legal).
Vendor – Rothschild (Corporate finance); Loyens & Loeff (Legal).

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• Buyouts
• Support services
• Benelux
• Deal in focus
• TDR Capital
• unq2015sep