Avis Budget Group Inc. (NYSE: CAR) has acquired a 45% common equity interest in Carey International Inc., a global provider of chauffeured ground transportation services. The deal was valued at approximately $60 million in cash, and includes a one-year option for Avis to increase its ownership to 80 percent. Carey is currently majority-owned by a consortium led by Chartwell Investments.
Avis Budget Group, Inc. (NYSE: CAR) announced today that it has acquired a significant interest in Carey International Inc., the leading provider of chauffeured ground transportation services worldwide. In connection with this transaction, Avis Budget Group invested approximately $60 million in cash and now owns approximately 45 percent of Carey's common stock. In addition, Avis Budget also obtained a one-year option to increase its ownership stake in Carey to approximately 80 percent, subject to certain conditions, which would likely include the assumption or repayment of Carey's existing indebtedness.
Carey International, with approximately $250 million in revenue in 2006, is the market share leader in the approximately $5 billion chauffeured ground transportation category. Carey offers its customers consistently superior premium service through the industry's only franchise system. Carey operates in 550 cities and 60 countries through its network of franchisees and alliance partners.
Avis Budget Group funded its investment with cash on hand and the investment is not expected to have a material impact on fourth quarter 2007 results.
“With this investment, Avis Budget Group expects to be able to offer corporate customers and travel partners the most complete portfolio of local ground transportation products and services available anywhere,” said Avis Budget Group Chairman and Chief Executive Officer Ronald L. Nelson. “As the world's premier chauffeured services brand, Carey provides premium-quality services across a broad geographic footprint, making it an ideal partner for Avis Budget.”
Carey International will continue to be led by its existing management team, including President and Chief Executive Officer Gary L. Kessler and Executive Vice President and Chief Financial Officer Mitchell J. Lahr, based out of Carey's offices in Washington, D.C. Carey's existing investor group, led by Chartwell Investments, continues to hold a majority ownership position.
“We are tremendously excited about our new relationship with Avis Budget Group,” Mr. Kessler said. “The opportunities for us to leverage Avis Budget's strong customer relationships, technological capabilities and vehicle services expertise will allow us to enhance service delivery to our clients and strengthen our position as the leader in the chauffeured transportation industry.”
About Avis Budget Group, Inc.
Avis Budget Group is a leading provider of vehicle rental services, with operations in more than 70 countries. Through its Avis and Budget brands, the company is the largest general-use vehicle rental company in each of North America, Australia, New Zealand and certain other regions. Avis Budget Group is headquartered in Parsippany, N.J. and has more than 30,000 employees. For more information about Avis Budget Group, visit www.avisbudgetgroup.com .
About Carey International Inc.
Carey International is the world's premier chauffeured vehicle service and innovative, value-added transportation solutions provider with locations in 550 cities and 60 countries. Since 1921, the Carey brand has represented uncompromising reliability and impeccable professionalism, safety, security, and quality. Carey sets the standard for corporate sedan and limousine services and state-of-the-art ground transportation through the chauffeured transportation industry's only franchise system. Carey provides a full range of chauffeured vehicle and logistics services, including luxury airport transport, road shows, special events, and tours. Certified professional chauffeurs, a fleet of luxury vehicles and an industry-leading quality assurance program help make Carey the clear industry leader. Carey also has the only Meetings and Events division in the industry, providing end-to-end event transportation and meeting management services including planning, logistics, and on-site coordination. For more information about Carey, please visit www.carey.com .
About Chartwell Investments
Chartwell Investments is a New York-based private equity firm that has completed over $2.5 billion in transactions. Chartwell invests in middle market companies with strong market positions, sound business models and meaningful growth prospects. Chartwell currently has investments in Carey International Inc., Richard Childress Racing, PPC Industries, Idaho Timber Corporation, and Goober Drilling. For more information about Chartwell Investments, visit www.chartwellinvestments.com .