Eurazeo leads buyout of Fiat business

The French private equity house is to lead the latest in what is expected to be a series of disposals at the Italian car manufacturer.

(PrivateEquityCentral.net) A consortium of French buyers, including Eurazeo, Pragma-Capital, and UI, have entered into exclusive negotiations to acquire truck-rental company Fraikin from Iveco, a unit of troubled Italian car giant Fiat SpA.

 

Eurazeo is France’s largest listed investment firm. Pragma-Capital is a private equity joint venture between banks Credit Agricole and Credit Lyonnais. UI is Credit Agricole’s direct investment arm.

 

Fraikin has estimated sales for the year 2002 in excess of E570m and an estimated pro-forma EBITDA in the range of E250m.

 

The terms of the transaction have not been disclosed, but the deal is valued at between E500m and E1bn. The transaction, which is due to close in January, will be funded by two-thirds debt and one-third equity.

 

Fiat's Iveco acquired Fraikin from the family investors who controlled the company, which also operates in Spain and the Benelux countries, for E556m in 1999. Fraikin owns 34,000 trucks in France, which it leases with management and maintenance contracts.

 

Eurazeo was created in April 2001 through the merger of Azeo and Eurafrance. Eurazeo has invested more than E600m, with real and potential capital gains of close to E200m. The firm, which also makes fund-of-fund investments, holds the largest single interest in Lazard, the world’s largest private investment bank. Eurazeo currently has a right to 15.8 per cent of Lazard’s income. In addition, Eurazeo also has an equity interest in Lazard ($316.4m out of $747.1m).

 

Unlisted Eurazeo investments include CCMX (jointly acquired with Apax Partners in March 1999); Manoir Industries; and François-Charles Oberthur Fiduciaire. Listed investments include Cap Gemini, Infogrames, Vivendi Environement, Saint Gobain, and Pearson.