July 5, Beijing, Indigo Glamour Co Ltd, a subsidiary of MBK Partners and CAR Inc, a Hong Kong Stock Exchange listed company, jointly announced a completion of the mandatory acquisition. All remaining offer shares of CAR Inc have been transferred to the offeror, indicating that CAR Inc, the Chinese auto rental service provider has completed the privatization and become a wholly-owned subsidiary of MBK Partners. It will be delisted from the Hong Kong Stock Exchange at 9 am on July 8, 2021.
MBK Partners, a leading private equity firm in North Asia, planned to acquire all the 443 million shares of CAR Inc held by UCAR Inc, another Chinese car-rental company, at a price of HK$4.00 ($0.52) per share for a total price of approximately HK$1.771 billion on November 10, 2020, becoming the second largest shareholder after Legend Holdings Corp. Two days later, MBK Partners put forward a voluntary comprehensive cash offer with prerequisites. The offer price per share was HK$4.00, involving approximately HK$8.49 billion.
On March 4 this year, MBK Partners' stake soared to approximately 94 percent and became the controlling shareholder of CAR Inc. The company sent a mandatory acquisition notice to the remaining shareholders in accordance with Article 88 of the Companies Law of the Cayman Islands on June 2.
On July 5, MBK Partners completed a comprehensive acquisition of CAR Inc. Since then, CAR Inc has become a wholly-owned subsidiary of MBK Partners and will be delisted from the Hong Kong Stock Exchange at 9 am on July 8, 2021.
Since last year, due to the restricted travel conditions caused by the COVID-19 pandemic, the shrinking tourism market, and the impact of Chinese coffee chain - Luckin Coffee's incident, CAR Inc once saw its share price cut in half. Subsequently, well-known United States investment firm Warburg Pincus, BAIC Group, SAIC Motor and MBK Partners, one of the largest private equity funds in North Asia, successively proposed the intention to acquire shares in CAR Inc.
MBK Partners eventually became the final winner, acquiring the stocks of CAR Inc's subsidiaries, at a premium of 55.79 percent compared to the average closing price of the previous 60 trading days, and finally completed the wholly-owned acquisition of CAR Inc.
Despite travel activities have been severely interrupted periodically due to the epidemic in 2020, CAR Inc still managed to achieve outstanding results, with adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of approximately 2 billion yuan ($309 million) and 2.1 billion yuan of sales revenue from used car business throughout the year.
Both the company's rental income and sales revenue of second-hand car have rebounded significantly since the third quarter of last year. In the second half of 2020, the company's income generated from car rental business, surged by 21.1 percent to 2.2 billion yuan from the first half of last year, while its sales revenue contributed by second-hand car sales reached 1.2 billion yuan, up 23.8 percent compared with the performance between January and June last year.
Even though the government proposed people to celebrate the Chinese Lunar New Year at home over the course of first quarter of 2021, the number of travelers during the peak season of the Spring Festival has fallen sharply, and the demand for car rental has also notably fallen.
With the implementation of a number of measures to boost efficiency and reduce costs, CAR Inc achieved total revenue of 1.2 billion yuan in the first quarter of this year. Among them, the income of its core business - car rental, amounted to 880 million yuan, grew by 0.5 percent on a yearly basis, with a net profit of 6 million yuan, a substantial growth over the same period last year. On the whole, whether in terms of fleet size, revenue capacity or brand influence, CAR Inc's position as the leader of China's car rental market is unshakable.
With MBK Partners' involvement, CAR Inc's financing channels is expected to further diversified and reinforced. In the first quarter of this year, the company completed the issuance of convertible bonds with a total principal of $175 million to Mcqueen SS Ltd (an affiliate of MBK Partners), and senior notes with a total principal amount of $250 million. These moves have greatly improved the its debt structure and boosted the market confidence on the company.
According to statistics, MBK Partners is one of the largest private equity funds in North Asia, with more than $24 billion in capital under management. Companies invested by MBK Partners are industry leaders, such as Godiva (a world-renowned chocolate producer and retailer), Kuroda Electric (a leading independent electronic component distributor in Japan), Daesung Industrial Gas (the largest industrial gas supplier in Republic of Korea), Modern House (the number one household goods retailer in Republic of Korea), Lotte Card (Republic of Korea's leading credit card company), etc.
07/07/2021 Dissemination of a Financial Press Release, transmitted by EQS Group.