FT. LAUDERDALE, Fla. & ORLANDO, Fla.--(BUSINESS WIRE)--Advantage Rent A Car (“Advantage”), a portfolio company of funds managed by The Catalyst Capital Group Inc., announced today that it has entered into a definitive agreement to purchase E-Z Rent-A-Car Group Holding, LLC (“E-Z”), a leader in value-priced car rental services.
The combination will reaffirm Advantage’s position as the fourth largest rental car company in the United States and provide greater service and product options to the consumer in the $25 billion U.S. auto rental industry. Through a network of 85 locations, the combined company will capitalize on its presence in 22 of the top 25 U.S. airports and its collective resources to deliver more choice and better value to consumers.
The company will focus primarily on the industry’s fastest-growing segment – value-priced rental car services. Together, Advantage and E-Z will cater to a wide range of customers, including value-focused leisure travelers, independent business professionals, and customers historically under-served by the major car rental companies. With one of the industry’s youngest and most diverse fleets – a majority of the combined company’s vehicles being less than twelve months old – Advantage and E-Z expect the combination to strengthen their position as the best value brands in the car rental market.
“This combination will create a stronger, more efficient and more competitive national provider that is better equipped to meet our customers’ needs in the rapidly changing rental car industry,” said Bill Plamondon, President of Advantage. “This transaction will optimize the resources and capabilities of our two brands to serve value-conscious retail and small business consumers who demand a modern fleet and exceptional service across the U.S., and will provide attractive opportunities for growth to our business and our employees.”
E-Z founders and co-owners Mehrdad Memarpouri and Hesam Sahraian added, “We are thrilled to partner with the new Catalyst-led Advantage – an organization with the same commitment to operational excellence, equal entrepreneurial spirit and strong growth-oriented culture – to create a next-generation car rental company focused on our two great brands. We believe this combination will create opportunities for both companies’ employees, and we are confident our customers, as well as our airport, fleet financing and online travel agency partners, will all benefit from our coming together.”
Messrs. Memarpouri and Sahraian have agreed to join the senior management team of the company and have agreed to make a significant financial reinvestment in the combination as part of the transaction.
“Catalyst sees tremendous opportunity to keep building on the operational and financial improvements it has made at Advantage. The combination with E-Z is targeted to enhance Advantage’s profitability and fast growth,” said Gabriel de Alba, Managing Director and Partner of The Catalyst Capital Group Inc. “This combination is a terrific fit with Catalyst’s long-term oriented investment strategy of renewing, refocusing and rebuilding businesses into industry leaders with sustainable competitive positions. This deal allows us to accelerate the growth momentum we have set in motion at Advantage since our initial investment. We will also be very well-positioned to further expand the combined company.”
After closing, the combined company will work to maximize growth and revenue-generating opportunities as well as take advantage of cost efficiencies in areas such as administrative costs and fleet maintenance. The companies expect minimal headcount reduction as a result of the growth-driven transaction.
Terms of the transaction were not disclosed. The parties expect to complete the transaction in the second quarter of 2015, pending necessary regulatory approvals and other customary closing conditions.
Advantage Rent A Car was founded in 1963 and is one of the leading rental car companies in the United States. The Catalyst Capital Group Inc., a private equity firm based in Toronto, Canada that manages $4.5 billion in various funds, acquired the Advantage brand and related assets in 2014. Advantage now operates at 44 locations across the United States. The new Advantage features one of the industry’s youngest, most diverse rental car fleets. The company also recently launched new growth initiatives including a business customer program, Advantage for Business, which offers a flat pricing structure and other perks for frequent business travelers.
Founded in 1994 with a fleet of just nine cars, E-Z Rent-A-Car has grown to be one of the leading car rental companies in the United States. E-Z has delivered value to its customers by offering quality vehicles at attractive prices in convenient locations backed by responsive customer service. The Company has expanded the number of company-owned facilities it operates in the U.S. and grown its footprint in smaller markets and international locations through affiliate agreements. Today, E-Z has 13 company-owned and 28 affiliate locations around the world.
Advantage Rent A Car was advised by Deloitte & Touche LLP and Latham & Watkins LLP; E-Z Rent-a-Car was advised by North River Advisors, LLC and Lowndes, Drosdick, Doster, Kantor & Reed, P.A.