GEOFF PERCIVAL: Rental firm Europcar fetches €26m

The Irish franchisee of car and van rental firm Europcar has been acquired by its parent group for an estimated €26m. Since its Paris flotation last year the French rental group has targeted the purchase of its better-performing franchisees with a reported war-chest of around €500m available.

The company is active in 10 countries across Europe.

With estimated revenues of €50m, Europcar Ireland is viewed as one of the group’s leading franchised operations.

The main beneficiaries of the sale are Colm Menton and Eugene O’Reilly, the two main shareholders in Europcar Ireland, which was advised by Investec on the deal.

Mr Menton will stay in his role of chief executive and Europcar Group chief Caroline Parot yesterday expressed confidence that Mr Menton and his management team can drive the Irish division’s growth.

“This is also a great opportunity for us to strengthen our leadership in our core European market. We are particularly pleased as this is not only the second major franchisee acquisition we’ve announced since our IPO but also a promising investment into new mobility services,” she said.

Europcar Ireland also owns the country’s largest car-sharing programme GoCar. That part of the business is expected to be nationwide by the end of the year.

Mr Menton said the new ownership arrangement will offer Europcar Ireland “a strong competitive advantage to continue our growth in Ireland and increase our market share”, saying that the move heralds the company’s next chapter of growth and development.

In a broker note, Deutsche Bank yesterday heralded the deal as “a good idea”, putting an estimated purchase price of €26m on the deal and saying it should be “materially value-enhancing”.

“We believe this [Europcar Ireland] is a high-performing franchisee, and for the purposes of our modelling use an assumption of earnings before interest, tax, depreciation, and amortisation, margins close to 13%.

"We would expect synergies — procurement, centralised back office, better yield management system — of a least 1-3 percentage points to drive this margin higher still, and with little incremental cost of achievement,” Deutsche said.

“Even if there are working capital requirements and costs to realising synergies, we would expect this deal to be materially value-enhancing,” it said.

More on this topic

Varadkar dismisses rent freeze despite renters paying higher amounts than at height of boomVaradkar dismisses rent freeze despite renters paying higher amounts than at height of boom

Rents €400 more per month than during Celtic TigerRents €400 more per month than during Celtic Tiger

Anger as cheapest room in new student accommodation in Cork to cost €228 per weekAnger as cheapest room in new student accommodation in Cork to cost €228 per week

Local authorities tell Minister they need more money to enforce short-term letting lawsLocal authorities tell Minister they need more money to enforce short-term letting laws


Lifestyle

Tis the season for sequins and excess, but minimalists can stick to their style guns in the season’s next level neutrals. From low-key glitz that’s perfect for party wear to the wardrobe heroes with trans-seasonal appeal, slide into neutral for maximum style with minimal effort. Carolyn Moore reports.Low-key glitz for minimalists with this season's neutrals

How to plump, hydrate and get rid of spots fast before your Christmas party.The Skin Nerd: Getting your quick fix for the festive party season

Irish photographer Seamus Murphy brought music star PJ Harvey to Afghanistan to film part of their documentary, writes Esther McCarthy.Headlong into the war zone in new documentary

Kya deLongchamps shows us how to champion our environmentWinter greens: How to champion our environment this season

More From The Irish Examiner