Leasedrive acquisition completed
10 December 2013
Leasedrive acquired by Hg Capital
Private equity firm Hg Capital has acquired UK top 15 leasing firm Leasedrive, taking an 80% stake for an undisclosed amount in a deal concluded late last week.
Former Lex Vehicle Leasing chief exec Jon Walden will return to the sector as Leasedrive's non-executive chairman, replacing Peter Opperman, who will now step down having joined the firm when it was acquired by private equity company LDC for £80m in 2008.
The board of directors, including MD David Bird and commercial director Roddy Graham, will stay on under the new ownership, which could also lead to further acquisitions as Hg seeks to build its fleet influence. Hg's Andrew Land will also join the board.
"Leasedrive has built a quality reputation, which is a key differentiator in this competitive and growing market," said Land. "We were particularly attracted to its differing sources of revenues, which provide the business with significant protection in economic downturns."
"Hg is investing and we are thrilled about it. They are a very welcome investor," Graham told BusinessCar. "They want to build a powerhouse and go out and make acquisitions."
Graham has previously predicted further industry consolidation in 2014. "As profits rise, and the wider economy continues to improve, certain leasing companies could become targets and the sector will undoubtedly attract new investors," he said earlier this month.
Hg Capital's previous experience in the fleet industry includes software specialist Epyx, which it sold to Allstar fuel card parent company Fleetcor in October having owned it since 2009.
"This new investment, which sees the senior management team retain equity and shareholding, demonstrates the confidence both we and our new backers have in the future of this company," said Bird. "This investment represents a further major milestone in the development of our business.
"We believe this transaction provides us with renewed stability and strengthens our position for future growth," Bird continued. "We have a proven track record of buying out, growing and improving the performance of this company."
Jon Walden returns to vehicle leasing for the first time since departing Lex in 2009. He was chairman of Epyx until October, and stepped down as chairman of car dealer group HR Owen when that was acquired in the same month. His other roles currently include non-executive chairman of accident management firm Kindertons and chairman of CEO mentoring specialist Merryck.
Leasedrive announced a deal with Mercedes-Benz earlier this year, where it would take on management of the German brand's fleet business. That followed the 2010 agreement to manage the vehicles previously on Masterlease contracts, on behalf of Investec, which also acts as funding provider for Leasedrive.
The firm rebranded from Leasedrive Velo in 2011, a company created from the merger of Leasedrive Group and Velo in late 2006.
Rumours in the business media have also linked Hg with a move for fellow leasing and fleet management firm Zenith, but a company insider described that as "pure speculation".