EAC sells car fleet manager to West PE

West LB’s mid-market buyout operation has acquired UK car fleet manager Velo from European Acquisition Capital, in a negotiated £60m secondary buyout.

West Private Equity (WPE), the semi-captive mid-market buyout manager affiliated with West LB, the German public sector bank, has completed a £60m secondary buyout of Velo, a provider of car fleet management services to the UK corporate sector.

WPE, which operates independently of West LB’s controversial principal finance business led by Robin Saunders, acquired Velo from European Acquisition Capital, the London-based mid-market investor.

In 2002, Velo, set up in 1988 as a subsidiary of UK merchant bank Kleinwort Benson, achieved an £1.5m operating profit on sales of £30m. Under the deal, WPE has invested £10m of equity while assuming £50m of fleet financing.

HSBC has been retained as banker to the transaction.

According to Philip Buscombe, WPE chief executive who established the unit in 1999, Velo is set to benefit from a period of consolidation in the UK’s fleet services sector. “There are too many participants in the market. Velo is already the largest fleet manager in the UK, and we intend to grow the business further through acquisitions as well as organically.”

Following the purchase of Velo, the West Private Equity Fund 2000, which in October 2000 closed on E400m rom institutions including WestLB, GIMV, CIBC and the European Investment Fund, is 60 per cent invested.

The business operates mainly out of London while also maintaining a presence in Stuttgart, Germany.