Investors Will Buy National Car Rental
National Car Rental, the nation’s third-ranking automobile rental agency, will be sold by Household International, a consumer finance and manufacturing company, to an investor group for $459 million, the company said Tuesday.
The investor group is being led by the financial services firm Paine Webber Group. It includes Fidelco Capital Group, a private investment firm in Millburn, N.J., and Ard Shiel Inc., a private investment banking firm active in leveraged buyouts.
National, headquartered in Minneapolis, ranks behind Hertz, a unit of UAL, and privately held Avis. National has about 3,000 outlets worldwide, with some of the foreign outlets run by affiliates. The company also is involved in car leasing and operates a fleet of 60,000 cars and trucks in the United States and Canada.
In the first nine months of 1986, National contributed $668.7 million, or 23.4%, to Household’s $2.86 billion in total revenue. Household, based in Prospect Heights, Ill., is a diversified concern that also has interests in consumer finance and manufacturing.
National also contributed $20.3 million, or 13%, to Household’s $156.9 million in net income for the nine months.
“The proceeds from this transaction can be used to expand our financial services and manufacturing interests, to acquire new businesses, to repurchase Household stock or some combination of these options,” said Donald C. Clark, Household’s chairman and chief executive. Household said the transaction will result in a fourth-quarter after-tax gain, but a spokesman said the amount has yet to be calculated.
The transaction is contingent on closing before the end of the year and must also be approved by Household’s board of directors.
Will Buy Back Shares
Paine Webber said that following the close of the transaction, Vincent Wasik, former executive vice president and board member of Hertz Corp., will be active in National Car’s management. Wasik is a partner in Fidelco Capital Group, it added.
Household also announced that it will spend up to $100 million on a share buy-back program to boost its stock price. A spokesman said this is the fifth stock repurchase program initiated this year. The first four resulted in recouping 14.5 million at a cost of $667 million. The company has 41 million shares outstanding.
