SG Fleet Group Limited (‘SG Fleet’ / ASX: SGF) announced in November 2015 the acquisition of novated and vehicle procurement specialist nlc.
The transaction will see SG Fleet significantly strengthen its presence in the novated segment while maintaining its leadership position in fleet management. The acquisition price of $200 million includes $46 million of net cash on nlc’s balance sheet, equating to an enterprise value of $154 million.
nlc Managing Director Matt Reinehr has opted to receive 9.1 million SG Fleet shares as part of the consideration1 . In addition to the scrip consideration, the acquisition is funded through an increase in debt ($110 million) and cash on hand.
SG Fleet anticipates cash EPS accretion in its first full year of ownership of over 25%, with further accretion to come in subsequent years. The 6.2-times FY15 EBITDA multiple does not include synergies, which are expected to be realised over the 2016 to 2018 financial year periods.
“SG Fleet has always taken a very disciplined approach to inorganic growth, and I am very happy to say that the acquisition of nlc delivers on our objectives on a number of fronts,” SG Fleet’s Chief Executive Officer, Robbie Blau, said.
“nlc is a strong business with diversified revenue streams, a quality, sticky customer book and a highly regarded management team. I am delighted that Matt and his team have decided to remain with the business. In the industry, nlc is recognised for its ability to win and retain customers and achieve strong margins and sustainable growth. Those qualities make this both a strategically attractive and a financially compelling deal,” he noted.
