EasyRentacar wins private equity backing

NBGI, Bank of Scotland take equity in the car-hire company in return for £26m worth of expansion capital.

EasyRentacar, the discount car-hire operation set up by EasyJet founder Stelios Haji-Ioannou, has received £26m worth of expansion capital from UK private equity provider NBGI Private Equity and Bank of Scotland.

EasyRentacar has plans to eventually follow EasyJet's lead and list on a stock exchange, probably within the next four years. The cash injection will help fund aggressive expansion across Europe. The company intends to build up its European network from 14 cities to 19 over the next 12 months, and has a long-term target of 60 locations by 2005.

According to the Financial Times, EasyRentacar will receive £13m of equity capital, with Bank of Scotland providing a further £13m by way of a loan. In return, the deal will give the new investors a joint holding in the company of between 17.5 and 32.7 per cent, depending on how the business will be valued at the time of the IPO. These terms give EasyRentacar an implied valuation of between £75m and £80m.