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Barloworld acquires Avis and budget businesses in Denmark
Barloworld Limited
(Registration number 1918/000095/06)
JSE code: BAW
ISIN code: ZAE000026639
("Barloworld")
BARLOWORLD ACQUIRES AVIS AND BUDGET BUSINESSES IN DENMARK
Diversified industrial company Barloworld has reached agreement to acquire the
Avis and Budget businesses in Denmark for DKK 170-million (R180-million) from
privately owned Biludan Gruppen A/S ("the acquisition"). These businesses will
be integrated with Barloworld"s existing Scandinavian car rental operations.
The acquisition will be financed from Barloworld"s internal resources. In
addition, financing facilities, which support the rental fleet, of DKK 450-
million (R475-million) will be taken over by Barloworld. The acquisition is
expected to enhance earnings for the 2006 financial year.
The acquisition already has the approval of the Avis and Budget licensors and
there are no significant suspensive conditions outstanding. Accordingly it is
expected to be completed during November 2005.
"This is another example of our long-standing "pacman" strategy of adding
adjacent territories to our existing operations," said Tony Phillips,
Barloworld"s chief executive officer. "Our car rental operations in Norway and
Sweden have performed well since they were acquired five years ago. Rental
growth has compounded at 12% annually and now stands at over 1.5-million rental
days per annum."
The Danish businesses have combined annual revenues exceeding DKK 250-million
(R265-million), sell more than 600 000 rental days per year, and operate a peak
season fleet of over 3 000 vehicles operating from more than 40 rental stations.
The Avis license has been held in Denmark for 40 years, while Biludan has only
recently acquired the Budget licence. The Budget business is small in comparison
with the Avis operation.
The experienced operational management team in Denmark will stay in place with
the exception of Ivan Nadelmann, chief executive and current majority owner of
the business, who will retire as an executive but will join the board of
Barloworld"s enlarged Scandinavian business as a non-executive director. Dag-
Andre Johansen, currently CEO of Barloworld"s existing Scandinavian car rental
business, will assume responsibility for the enlarged business.
Welcoming the Danish management team to Barloworld, Tony Phillips noted that
their businesses were recognised as being of a high standard. The sharing of
this operational excellence with Barloworld"s existing car rental operations in
southern Africa and Scandinavia would be welcomed. The Danish team"s experience
in used vehicle sales and in light commercial vehicle rentals was likely to
bring benefits to Barloworld"s operations in Norway and Sweden. Phillips also
noted the long history of support for a democratic South Africa from Denmark as
well as the steadily increasing number of Scandinavian tourists to southern
Africa.
"We have already identified numerous marketing opportunities as well as other
synergies which stem from the natural integration of business in Scandinavia.
The deal also has the same strategic logic as the original acquisitions in
Sweden and Norway. These include a common Avis brand, Wizard rental system and
principal in Avis Europe plc, as well as similar reporting systems and the same
time zone as South Africa. "" concluded Phillips.
Avis Norway and Avis Sweden were purchased by Avis Southern Africa Limited in
2000, coinciding with Barloworld"s acquisition of its initial minority
shareholding in Avis Southern Africa. In March 2004 Barloworld acquired full
ownership of Avis Southern Africa. The Budget licence was acquired for Norway in
2004 and, earlier this year, for Sweden. Avis and Budget in Norway and Sweden
rent vehicles from over 300 locations, two thirds of which are operated by sub-
licensees.
Released on behalf of Barloworld Limited by Westcom. For further information
contact Mark Drewell, Head of Corporate Communication, Barloworld Limited on +27
11 445 1202 or
e-mail mdrewell@barloworld.com
For more information on Barloworld visit www.barloworld.com
Sponsor:
J.P.Morgan Equities Limited
Date: 27/10/2005 12:00:04 PM Produced by the JSE SENS Department
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