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Paul Barker's blog: 11 February 2014 - What do Hg Capital's acquisitions say about the leasing industry?
Date: 11 February 2014
Private equity firm Hg Capital is certainly making an impression in the leasing industry.
Two big names have come under the company's wing in as many months, as you'll see from our front-page story, and with both Leasedrive and Zenith in its portfolio.
Going by our 2013 BC50 figures, Hg Capital will be left with around 48,000 vehicles on its collective balance sheet.
We can still expect the two companies to operate independently for now, but, at our last count, that figure would put Hg eighth in leasing firm heavy-hitters territory, between Hitachi Capital Vehicle Solutions and Arnold Clarke.
If it swallows up any more leasing businesses, something that shouldn't be completely ruled out, or generates a bit of the 'organic growth' that every company is so keen on, then it would be starting to head towards the big bank-backed outfits.
The whole affair poses an interesting question about the health of the leasing industry as a whole.
Are we in a position where medium-sized leasing firms are viewed as appealing operations and a good long-term bet as businesses continue the drawn-out process of recovery from the recession?
And what will a new and enthusiastic top-10 player mean for the rest of the market?
Plus there's the basic question of what Hg has got planned for Leasedrive and Zenith, two firms with good names and reputations already.
How the new owners leverage that and bring the businesses together without damaging either will be fun to watch.
