TDR Capital's £1.9bn offer for BCA agreed

The board of BCA Marketplace has accepted a £1.9 billion offer from LeasePlan private equity owners TDR Capital, which will now be recommended to shareholders.

The offer come a year after a £1.6bn bid from private equity group Apax Partners, which was rejected. It valued BCA, which also owns WeBuyAnyCar.com, at £2 a share, which the remarketing specialist saw as an undervaluation.

The new cash offer from TDR Capital of £2.43 per share, which has been recommended by the BCA board, is almost 30% higher than the £1.87 the shares were trading at a week ago.

BCA said that in recommending the offer to shareholders, the board believes it is in the “best interests of all stakeholders in the company”, and equated to a “significant premium” to the prevailing share price.

It added that the deal would allow BCA to “develop its business as a private, unlisted company”.

TDR Capital said: “BCA is a high-quality business that operates in a market that is changing rapidly, driven by evolving customer demands and digital disruption. 

“TDR has a strong track record of investing in businesses and partnering with management to develop and grow their operations.

“We are highly supportive of BCA management and believe that with the right investment and support, BCA can continue to grow and evolve its market-leading automotive aftermarket services offering for the benefit of its customers, employees and partners."

BCA's most recent set of annual results, published yesterday (Tuesday, June 25), showed that the group had boosted its operating profits by £12.6 million from £87.6m to £100.2m.

Group revenue was £3bn (2018: £2.4bn) with more than one million vehicles sold in the year for the second consecutive year.

Avril Palmer-Baunack, executive chairman said: “BCA has delivered a good resilient performance in the year against the backdrop of a challenging new car market, subdued conditions in the more stable used car market and economic uncertainty created by Brexit.

“Webuyanycar.com further demonstrated the strength of its brand, its growth potential and market leading position in UK car buying, delivering accelerated volumes in the second half of the year with growth of 23.2% (full year growth of 18.7%) whilst maintaining its 5* Trustpilot rating.”

Palmer-Baunack explained that the Group had been successful in broadening its multi-service relationships with many of the industry’s “leading players”, helping them to “access and share the speed, intelligence and performance that our comprehensive range of services provide”.

In International Remarketing, growth of 23.2% in cross-border sales was facilitated by its 1Europe programme designed to open up all our markets to buyers in a consistent, easy to transact manner.

Palmer-Baunack continued: “Combined with internal efficiencies this has resulted in improved profitability. Adjusted EBITDA has increased 7.8% to £171.9m.”

The company is the UK's largest auction and remarketing business with 21 auction sites, as well as a logistics business, defleet services and dealer funding services.

TDR Capital is part of LP Group BV, a consortium which in 2016 bought LeasePlan from Global Mobility Holding BV, a joint venture of Volkswagen Aktiengesellschaft and Fleet Investments BV.

The consortium represents a group of long-term investors and also includes leading Dutch pension fund service provider PGGM, Denmark’s largest pension fund ATP, GIC, Luxinva SA, and a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA).

LeasePlan was founded in 1963 and now employs more than 7,300 staff in operations across 33 countries. Last year's FN50 research identified it as the third largest contract hire company in the UK, with a risk fleet of 169,695 vehicles.

TDR Capital's advisers for the BCA deal were Bank of America and HSBC; Jefferies, Goldman Sachs and Kinmont were BCA’s financial advisers.