(Reuters) - London-based private equity firm HgCapital Trust Plc (L:HGT) has agreed to sell Zenith, a British vehicle leasing business, to peer Bridgepoint in a deal valued at 750 million pounds, its manager HgCapital said on Monday.
The sale delivers a 2.9 times investment multiple and a 46 percent gross internal rate of return over the investment period, HgCapital said in a statement.
Leeds-headquartered Zenith has over 500 employees and operates a fleet of about 85,000 vehicles. Its services include funding company cars and commercial vehicles, and providing outsourced fleet management services.
HgCapital Trust would realise cash proceeds of about 59 million pounds from the deal, an uplift of 15.4 million pounds, or about 35 percent, on the carrying value of the asset as of Nov. 30, 2016.
HgCapital Trust initially invested in Zenith in February 2014 and merged it with Leasedrive, a company it already owned, to achieve economies of scale.
Zenith, whose customers have included pub firm Greene King (L:GNK), grocer Asda [WMTAS.UL] and financial firm Santander (MC:SAN)
"We believe that (Zenith) can continue its impressive growth trajectory through its continued focus on customer service, technology and targeted acquisition activity," said Emma Watford, Bridgepoint's head of business services sector team.
HSBC, RBS (LON:RBS) and Lloyds (LON:LLOY) will provide debt financing for the transaction, Bridgepoint said separately.
HgCapital's advisers on the sale were Evercore, Deloitte, OC&C, KPMG, Weil Gotshal & Manges and Sidley Austin. HSBC & Investec, White & Case, LEK, Deloitte, ERM and EY advised Bridgepoint.