HgCapital has announced that it has agreed the sale of Zenith, the largest independent vehicle leasing business in the UK, to Bridgepoint in a transaction totalling £750 million.
Headquartered in Leeds, with full-service operations in both Solihull and Wokingham, Zenith has more than 500 employees and provides end-to-end automotive services focused on contract hire, salary sacrifice, fleet management and short-term hire services to customers across the UK.
The company operates a fleet of around 85,000 vehicles and focuses on serving blue-chip customers, principally as sole supplier.
HgCapital initially invested in Leasedrive in December 2013, with LDC retaining a minority stake in the business, subsequently completing the merger with Zenith in February 2014, and the business has operated as a single entity since March 2014. The merger of Zenith and Leasedrive was driven by “the highly complementary nature of the two businesses and the potential to create economies of scale”, the statement said.
A spokesman said: “A substantial part of the value created during HgCapital’s investment period has been driven by the close collaboration of Zenith’s management and the HgCapital team.”
Andrew Land, a partner at HgCapital, said: “We have had a very successful partnership with the Zenith management team and are proud to have been part of the company’s success. The business model has been a great fit with Hg’s investment strategy, providing mission-critical services to customers through long-term relationships and the use of proprietary technology. We have no doubt that Tim, Mark and the rest of the team will have continued success working with Bridgepoint.”
Tim Buchan, CEO at Zenith, said: “We thank HgCapital for their contribution and are pleased to welcome Bridgepoint as our new partner. We look forward to working together on our long-term strategy of continued investment in product and system developments.”
Emma Watford, partner at Bridgepoint and head of its business services sector team, commented: “Zenith is already best-in-class with a proven business model that has had an unbroken track record of growth over a long period. It benefits from an exceptional management team and, with them, we believe that the business can continue its impressive growth trajectory through its continued focus on customer service, technology and targeted acquisition activity.”
HgCapital were supported by Evercore, Deloitte, OC&C, KPMG, Weil Gotshal & Manges and Sidley Austin on the sale.
This is the sixth successive MBO of Zenith in 14 years. Deloitte locally has advised on all six transactions, and on the latest £750m deal, acted as co-financial adviser and lead debt adviser to Hg Capital and to Zenith and also as lead adviser to the management team led by Tim Buchan and CFO Mark Phillips.
Squire Paton Boggs in Leeds also provided legal advice to the management team. The Deloitte teams were led by Martin Jenkins and also comprised Oliver McRae and Anil Gupta and the Squires team was led by Jonathan Jones and Jayne Aarons.
Mr Jenkins said: “I believe Zenith’s six successive MBOs to be unique to the world of private equity with stellar returns being delivered for each of the previous five investors. In Bridgepoint Zenith has found the ideal partner to support the next stage of its journey at a time a great change and opportunity in the industry”