A privately-owned Budget car rental company, Marita Car Rental, (“MCR”), with franchise operations in Buffalo, NY and Orange County, CA had decided to sell its franchise. The Buffalo location had been owned for almost 50 years and the Orange County franchise for 5 years. With decreased airport traffic in both locations, additional competition, and the increased use of ride-share services, revenues had steadily decreased over the past few years and the company was consistently losing money. In addition, MCR’s fleet bank line had expired and the banks were not eager to renew due to the continued operating losses. Getzler Henrich (“GH”) had worked with the company earlier in the year, assisting with the vetting of its business plan, and MCR engaged GH to sell the business.
GH prepared an offering memorandum and went to market, reaching out to private equity firms, potential strategic buyers (including other Budget franchisees), other car rental businesses, and Avis Budget Group. GH set up a virtual data room and worked with MCR to manage all due diligence information requests from potential buyers. With operating losses looming overhead, the ultimate buyer needed to be a strategic player, who could use its back office, and eliminate most of the administrative expenses.
While there were several initial potential buyers, the ultimate buyer was Avis Budget Group. GH negotiated with Avis Budget Group and assisted management/ownership in getting the deal closed. During the sale and negotiating process, GH also worked with the company on reporting to its lenders, reviewing cash flows and liquidation plans for those assets not purchased in the sale.