August 26, 2020

TO ACCESS THIS DOCUMENT This is a protected document. The first two pages are available for everyone to see, but only faculty members who have verified. Q2 In what ways does Hertz conform or not conform to the definition of an “ideal LBO target”? Do you believe Hertz is an appropriate buyout. The Hertz Corporation. World Largest Rental Company; More than 30M rentals worldwide; 6, Locations in more than countries; Fleet of.

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The first two pages are available for everyone to see, but only faculty members who have verified faculty status with Darden Business Publishing are able to view this entire inspection copy. We will write a custom sample essay on Bidding For Hertz: Overview In late summerGreg Ledford, managing director and head of automotive and transportation buyouts at the Carlyle Group, found himself examining his BlackBerry atop the Great Wall of China.

Though he had planned to be sightseeing with his daughter, his immediate focus was to finalize the terms of the second-largest leveraged buyout in history.

The target in question was Hertz, a subsidiary of the Ford Motor Company, which was up for sale. Ledford needed to decide the price he and his co-investors would offer for Hertz as well as assess the potential returns and risks of the deal.


Already months of work, many dollars of due diligence, and arrangement of tentative financing had gone into the bid. Complicating matters, he knew he faced tough competition from a buyoht buyout group, no doubt engaged in a similar process.

He believed a private sale that was competitive with an IPO would be viewed favorably by Ford due to its greater upfront cash proceeds and certainty of execution. It was written as a basis for class discussion rather than to illustrate effective or ineffective handling of an administrative situation.

Jacobs as a car rental operation with a modest inventory of 12 Model T Fords that Jacobs personally had repaired and repainted. Hertz later became an independent, wholly owned subsidiary of Ford in Less than three years later, Ford issued a minority stake of shares through a public offering on the NYSE on April 25, In earlyFord reacquired the outstanding shares of Hertz and the company again became a wholly owned subsidiary of the Ford Motor Company.

Bidding For Hertz: Leveraged Buyout Essay

In fact, the company had produced a pretax profit each year since During the period torevenues had grown at a compound annual growth rate of 7. Hertz currently operated in two business segments: RAC was supported by a network of franchises that together with company-owned facilities operated in more than 7, airport and local locations leeveraged the world.

The company led its competition in the airport car rental market in Europe with operations at 69 major airports. Hertz owned and leased cars from more than 30 manufacturers, most of which it had long-term leasing.


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