Hertz Global, backed by Clayton, Dubilier & Rice, Inc. and The Carlyle Group, plans to offer 40 million shares in a registered public offering. CD&R and Carlyle intend to purchase $150 million on common stock. The company will also offer $250 million worth of convertible senior notes. The company plans to use to proceeds to increase liquidity and repay debt. The firm’s buyout investors have recouped their investment through dividend recapitalizations and public offerings in 2006.
Hertz Global Holdings, Inc. (NYSE: HTZ) (“Hertz Holdings”) today announced a public offering of common stock and convertible senior notes.
Hertz Holdings intends to offer approximately 40,000,000 shares of common stock in an underwritten registered public offering. In connection with this offering, Hertz Holdings intends to grant the underwriters a 30-day option to purchase up to an additional 6,000,000 shares of common stock. In addition, investment funds associated with Clayton, Dubilier & Rice, Inc. and The Carlyle Group, existing stockholders of Hertz Holdings, are expected to purchase at least $150,000,000 of common stock in a substantially concurrent transaction, which is expected to close after the public offering of common stock.
Hertz Holdings also intends to offer concurrently approximately $250,000,000 aggregate principal amount of convertible senior notes due June 1, 2014 in an underwritten registered public offering. In connection with this offering, Hertz Holdings intends to grant the underwriters a 30-day option to purchase up to an additional $37,500,000 aggregate principal amount of convertible senior notes. The convertible senior notes will be convertible, under certain circumstances, into cash, shares of Hertz Holdings common stock, or a combination of cash and shares, at the option of Hertz Holdings. The offering price, interest rate, conversion price and other terms of the convertible senior notes will be determined by Hertz Holdings and the underwriters.
The closing of the convertible notes offering and underwritten offering of common stock will not be contingent on each other.
Hertz Holdings intends to use the proceeds from the offerings to increase its liquidity and for general corporate purposes, including the repayment of consolidated debt.
J.P. Morgan Securities Inc., Goldman, Sachs & Co., Merrill Lynch & Co. and Barclays Capital Inc. are acting as joint book-running managers for the offerings.
Hertz Holdings has filed a registration statement with the U.S. Securities and Exchange Commission (SEC) for the public offering of common stock and convertible notes offering to which this communication relates. Before you invest, you should read the applicable preliminary prospectus supplement, when available, and the accompanying prospectus for more complete information about Hertz Holdings and these offerings. You may get these documents for free by visiting IDEA on the SEC website at www.sec.gov. Alternatively, copies may be obtained from J.P. Morgan Securities Inc., Prospectus Library, 4 Chase Metrotech Center, CS Level, Brooklyn, NY 11245, (718) 242-8002; or from Goldman, Sachs & Co., Attn: Prospectus Department, 85 Broad Street, New York, NY 10004, call toll-free 1 (866) 471-2526, or fax 212-902-9316, or email email@example.com; or from Merrill Lynch & Co., Attn: Prospectus Department, 4 World Financial Center, 250 Vesey Street, New York, NY 10080, (212) 449-1000; or from Barclays Capital Inc., c/o Broadridge, Integrated Distribution Services, 1155 Long Island Avenue, Edgewood, NY 11717, call toll-free 1(888) 603-5847, or email a request to firstname.lastname@example.org.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy the notes, nor shall there be any sale of the notes in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. A registration statement relating to the common stock and convertible senior notes became effective on May 19, 2009, and this offering will be made pursuant to prospectus supplements, when available.
The Hertz Corporation (the “Company”), a subsidiary of Hertz Holdings, is the world’s largest general use car rental brand, operating from approximately 8,000 locations in 145 countries worldwide. Hertz is the number one airport car rental brand in the U.S. and at 42 major airports in Europe, operating both corporate and licensee locations in cities and airports in North America, Europe, Latin America, Australia and New Zealand. In addition, the Company has licensee locations in cities and airports in Africa, Asia, and the Middle East. Product and service initiatives such as Hertz #1 Club Gold®, NeverLost® customized, onboard navigation systems, SIRIUS Satellite Radio®, and unique cars and SUVs offered through the Company’s Prestige, Fun and Green Collections, set Hertz apart from the competition. In 2008, the Company launched Connect by Hertz, entering the global car sharing market in London, New York City and Paris. The Company also operates one of the world’s largest equipment rental businesses, Hertz Equipment Rental Corporation, offering a diverse line of equipment, including tools and supplies, as well as new and used equipment for sale, to customers ranging from major industrial companies to local contractors and consumers from approximately 330 branches in the United States, Canada, China, France and Spain.
CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You should not place undue reliance on these statements. Forward-looking statements include information concerning Hertz Holdings’ outlook, anticipated revenues, results of operations and implementation of productivity and efficiency initiatives, including targeted job reductions, and the anticipated savings and restructuring charges expected to be realized or incurred in connection therewith. These statements often include words such as “believe,” “expect,” “project,” “anticipate,” “intend,” “plan,” “estimate,” “seek,” “will,” “may,” “should,” “forecast” or similar expressions. These statements are based on certain assumptions that Hertz Holdings has made in light of its experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors that Hertz Holdings believes are appropriate in these circumstances. As you read this press release, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties and assumptions. Many factors could affect Hertz Holdings’ actual results and its ability to implement its cost savings and efficiency initiatives successfully, and could cause Hertz Holdings’ actual results to differ materially from those expressed in the forward-looking statements. Some important factors include: Hertz Holdings’ operations; economic performance; financial condition; management forecasts; efficiencies, cost savings and opportunities to increase productivity and profitability; income and margins; liquidity and availability of additional or continued fleet financing including as a result of the financial instability of the entities providing credit support; the financial instability of the manufacturers of our vehicles: anticipated growth; economies of scale; the economy; future economic performance; Hertz Holdings’ ability to maintain profitability during adverse economic cycles, potential tangible and intangible asset impairment charges and unfavorable external events (including war, terrorist acts, natural disasters and epidemic disease); future acquisitions and dispositions; litigation; potential and contingent liabilities; management’s plans; taxes; and refinancing of existing debt. In light of these risks, uncertainties and assumptions, the forward-looking statements contained in this press release might not prove to be accurate and you should not place undue reliance upon them. All forward-looking statements attributable to Hertz Holdings or persons acting on Hertz Holdings’ behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made, and Hertz Holdings undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Hertz Holdings cautions you therefore that you should not rely unduly on these forward-looking statements. You should understand the risks and uncertainties discussed in “Risk Factors” and elsewhere in Hertz Holdings’ 2008 Annual Report on Form 10-K for the fiscal year ended December 31, 2008, as filed with the United States Securities and Exchange Commission, or the “SEC,” on March 3, 2009, could affect Hertz Holdings’ future results and the outcome of its implementation of its cost savings and efficiency initiatives, and could cause those results or other outcomes to differ materially from those expressed or implied in Hertz Holdings’ forward-looking statements.