Europcar Group, the European leader in vehicle rental services and a major player in mobility markets, announces today that it has signed an agreement with Investindustrial to acquire Goldcar, Europe’s largest low cost car rental company.
Goldcar is a major low cost operator in Europe thanks to its strong positions in Spain and Portugal and its strong know-how in running a lean and efficient pure low-cost operating model. Goldcar has built an impressive track record of organic growth (delivering 17% revenue growth p.a. between 2008 and 2016) and best-in-class Corporate EBITDA margins and FCF conversion rates. In 2016, Goldcar generated revenues of around €240 million and an estimated adjusted Corporate EBITDA of approximately €48 million.
With this strategic acquisition, the Europcar Group will increase its exposure to three major growth engines – the Mediterranean region, the leisure segment and the low cost segment – and will become a major player in the fast growing European low cost segment.
The acquisition of Goldcar will create value for the Europcar Group as it will strengthen the Group’s expertise and know-how in low cost operations and will therefore significantly improve the revenue growth prospects of Europcar’s low cost business unit.
The acquisition is subject to customary conditions precedent, including its approval by antitrust authorities, and is expected to close in the second half of the year 2017.
The proposed transaction, which is expected to generate close to €30 million of cost synergies per annum by 2020, is based on a Corporate Enterprise Value of €550 million and a post-synergy Adjusted Corporate EBITDA around 7x. Europcar Group expects the transaction to be materially accretive to its earnings per share from the first full year post closing onwards.
A dedicated bridge-financing has been signed with by a large and international banking syndicate to support the binding offer made by Europcar Group and to cover Goldcar’s corporate- and fleet-related refinancing needs. In order to maintain an efficient and resilient capital structure, Europcar Group plans to raise equity in an amount representing up to 10% of its capital, subject to market conditions. Post the proposed Goldcar acquisition and equity raise, Europcar Group expects to reach a Corporate Net financial Debt to EBITDA ratio comfortably below 3x by year end 2017.
For Caroline Parot, Chief Executive Officer of Europcar Group:
“Following the acquisition of Buchbinder in May, the acquisition of Goldcar is yet another major strategic step for the Europcar Group as it will enable us to become a major player in the European low cost segment. This strategic move is fully in line with our 2020 Ambition and boosts our confidence in our ability to deliver the targets we announced in October 2016 of reaching at least €3 billion of annual revenue and an Adjusted Corporate EBITDA margin at the Group level of at least 14% by the end of 2020.
With the combination of InterRent, Buchbinder and Goldcar, we will build the platform and the scale we were aiming for in the low cost segment. Hence, we expect our low cost business unit to generate a significant portion of our Group revenues in the future and more importantly to anchor the development of the Group as a whole.
We are pleased to welcome an experienced management team with its best-in-class know- how and track record in the low cost segment into the Group. We look forward to working together with them on the integration of Goldcar into the Europcar Group. This combination of our two highly compatible businesses will not only create a major player in the low cost segment but is also expected to deliver significant cost and revenue synergies for the whole Group.
This game changing transaction confirms the major role we want to play in our industry’s European consolidation process. After the recent transactions with our Irish and Danish franchisees, the acquisition of Buchbinder in Germany, and now the acquisition of Goldcar, we are well placed to have completed the bulk of our 2020 Ambition in terms of acquisitions and, following the acquisition of Goldcar, we intend to focus on integration, delivering the expected synergies, but also to continue to work on the digitalization of our customer journey, the development of our footprint and the pursuit of operational excellence”.
For Juan Carlos Azcona, Chief Executive Officer of Goldcar:
“We are very excited to be joining the Europcar Group, the leading player in the European car rental industry, and look forward to bringing our entrepreneurial know-how and low cost expertise to the Group.
Over the last years, we have strived to be a game changer in the leisure mobility space in Europe, delivering double-digit organic growth and best-in-class margins, thanks to a unique combination of scale, innovation and agility.
In a still largely fragmented space, we see plenty of opportunities to continue to grow Goldcar’s business in the future and believe the sharing of our respective best practices and corporate strengths will help boost the combined company’s growth prospects even further.”
 Goldcar does not use Adjusted Corporate EBITDA in its reporting. In order to facilitate the comparison with Europcar Group’s KPIs, Adjusted Corporate EBITDA has thus been estimated based on our understanding of Goldcar financials using a normalized interest rate for fleet financing.
 On a pro forma basis, i.e. including acquisitions announced since January 1, 2017
 The 2020 Adjusted Corporate EBITDA target of at least 14% excludes the impact of the new mobility services division.
Source: Europcar Group