Enterprise Holdings to buy 20 percent stake in Brazil’s Unidas: Reuters

Enterprise Holdings Inc, the world’s No. 1 car rental company, has struck a deal to buy a 20 percent stake in Brazilian peer Unidas SA for an undisclosed amount, reflecting growing interest in an industry that has weathered the country’s roughest recession since the 1930s.

In a securities filing on Monday, Unidas said St. Louis-based Enterprise [ERACR.UL] would buy 10.9 million shares from investment vehicles controlled by buyout firms Gávea Investimentos Ltda, Vinci Partners and Kinea Investimentos Ltda. The deal hinges on regulatory approval and other unspecified conditions.

The deal was reported in a column in O Globo newspaper earlier on Monday. Enterprise did not immediately respond to a request for comment.

Car rental demand remains resilient during the longest and harshest recession in eight decades, high unemployment and a slump in consumer and corporate spending. Rental growth at Unidas fared better than expectations in the first half because of pricing flexibility and better use of current capacity, HSBC Securities analysts said last week.

Analysts have been raising their forecasts for rental volume and fleet utilization for next year, indicating expectations that a gradual recovery in Brazil’s economy would gain traction.

The three buyout funds currently have a combined 65 percent stake in Unidas [UNIDA.UL].

Principal Gestão de Activos SA, which is controlled by a group of Portuguese investors, will maintain a 35 percent stake in Unidas. The three funds bought into the company five years ago, increasing their ownership two years later.