SG Fleet to acquire LeasePlan ANZ

A $273m cash and equity deal will create a fleet leasing and management giant with 250,000 vehicles under management.

The fleet leasing company created by the deal will have some 250,000 vehicles under management. Picture: AFP

Vehicle fleet leasing and management company SG Fleet has outlined plans to raise capital in order to acquire competitor LeasePlan Australia and New Zealand for $273m and a stake in the merged entity.

If approved by shareholders, the acquisition of the Netherlands-based LeasePlan’s local arm will create a fleet leasing and management giant with an enterprise value of $2.5bn and some 250,000 vehicles under management.

LeasePlan will receive a 13 per cent in this new company as part of the deal.

In a statement on Wednesday morning the ASX-listed SG Fleet said the bid – previously revealed by The Australian – would be partly funded by an $86m equity raising through the issuance of new shares at $2.45 each, a 5 per cent discount to SG Fleet’s last trading price of $2.58 on March 23, when it entered a trading halt.

The raising means that SG Fleet’s majority shareholder, South African logistics company Super Group, will see its stake in the new group reduced from its current 60.13 per cent to 52.3 per cent.

SG Fleet CEO Robbie Blau said the deal was “transformational” and anticipated it would eventually generate annual synergies of $20m for just $9m of integration costs.

“LeasePlan Australia and New Zealand is a very complementary business to SG Fleet, in terms of business activities, customer profile, product quality and service culture,” he said.

“This creates significant scope for synergies and the ability to add additional scale across operations, and funding and procurement activities.

“The resulting efficiencies will allow us to deliver a very compelling offering to existing and prospective customers.”

Mr Blau also said the acquisition would improve the resilience of the business by increasing the proportion of full-service products the company can offer and boost recurring revenue from 56 per cent of total net revenue to 70 per cent.

“This significantly raises the overall quality, as well as resilience, of our earnings, something we have been working towards for some time,” he said.

SG Fleet’s bid comes as the global pandemic continues to interrupt vehicle manufacturing and transport, constraining the supply of new stock in Australia and New Zealand.

The company said it expected this supply constraint would continue until at least the end of the financial year, creating some stock shortages that will be compensated for by continued strong demand.

“As to the outlook for the remainder of the financial year, we continue to expect a strong second half,” Mr Blau said.

“For the 2022 financial year, we anticipate growth across all revenue lines, with the exception of end-of-lease income as the residual value environment will probably start to normalise as we approach the end of the current financial year.”

SG Fleet expects the acquisition to be finalised in the third quarter of 2021, subject to shareholder approval.

Originally published as SG Fleet to acquire LeasePlan ANZ