Hg Capital plots joined-up future following Zenith and Leasedrive deals
11 February 2014
The new owner of leasing companies Zenith and Leasedrive is to form a four-strong holding company board to establish the best way to take the two top-15 firms forward, subject to the Zenith acquisition, announced late last month, gaining the expected regulatory approval.
Private equity firm Hg Capital added a majority stake holding in Zenith, reportedly for around £200m and bought from Morgan Stanley Private Equity Group, to the 80% stake in Leasedrive it acquired in December.
Zenith chairman Andrew Cope will step down as part of the deal, although he retains a financial interest in the company he has been with for 25 years.
According to the announcement from Hg, Zenith will continue to be led by chief executive Tim Buchan and chief financial officer Mark Phillips, with the addition of three Hg Capital executives Andrew Land, Nick Turner and Simon Cottle.
Subject to regulatory approval, a new holding board will be formed, consisting of Buchan, Land, Leasedrive chief executive David Bird and Jon Walden, the former Lex Autolease boss, who has been confirmed as non-executive chairman of Leasedrive.
"At the moment the two companies are completely separate and will continue to be separate until we get approval," Walden told BusinessCar.
"We intend to form a holding company board to make the most of Hg's common ownership.
"What that will be I don't know yet because we're not allowed to meet until the deal is complete."
"I think both businesses are well-managed and good businesses that have grown strongly and have a good customer-service reputation, are professional and have good people," continued Walden.
"They can grow in a market that is reasonably mature - it's growing slowly, but not how it was in the 1980s and 1990s, and there are good opportunities to grow customer share."
Walden confirmed his role will continue to be a non-executive position. "I've done the chairman bit and enjoyed it, but hopefully what I can do now is bring the benefit of my experience," he said.
Should Hg decide to combine its new acquisitions, the combined force would create a new 48,000-vehicle top-10 player of similar size to GE Capital and Hitachi Capital's vehicle leasing operations.
At present, Leasedrive is ranked 15 in the BC50 list of the UK's biggest lease firms, two places behind Zenith.
Walden refused to rule out more acquisitions by Hg Capital, which sold fleet software specialist Epyx in October.
"These two are both big transactions, so for the immediate future I would expect that they are satisfied with what they have got and will be making the most of them," he said.
"In the future, I wouldn't rule out more acquisitions, but I think they can grow very well organically with these businesses."