Zenith motors on in £200m buyout

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ZENITH announced its fifth management buyout today in a deal valuing the Yorkshire-based fleet manager at more than £200m.

HG Capital, the London-based private equity firm, has agreed to acquire a majority stake holding in the parent company from Morgan Stanley Global Private Equity.

Zenith is thought to have gone through more MBOs than any other company in Yorkshire or indeed the UK.

Tim Buchan, chief executive at Zenith, said: “We thank MSPE for their contribution and are pleased to welcome HG Capital as our new partner.

“We look forward to working together on our long term strategy of continued investment in product and system developments”.

Andrew Land, of HG Capital, said: “We are delighted to be investing in Zenith and to be supporting its high calibre management team. We look forward to working closely with them to continue their growth and success”.

Jean-Marc Jabre, managing director of Morgan Stanley Private Equity, said: “Over the last few years, we have worked closely with the Zenith management team to grow the business, invest in its infrastructure, including its brand, the award winning Pulse platform, and its funding strategy.

“We are proud to have played a part in Zenith’s history and wish them well on the next steps of their development with Hg Capital.”

Dealmaker Martin Jenkins of Deloitte in Leeds advised HG Capital and Zenith. He has advised on all five MBOs. Lawyer Jonathan Jones of Squire Sanders provided legal advice.

Andrew Cope, the outgoing chairman and former managing director, will remain an investor.

He told the Yorkshire Post: “It’s a good deal for everybody.”

The deal is subject to regulatory approvals.

Zenith is the UK’s largest independent leasing, fleet management and vehicle outsourcing business and manages a fleet of more than 40,000 vehicles.

It is one of Yorkshire’s most visible private equity success stories.

The Morgan Stanley buyout in September 2010 was the fourth and valued the company at £85m.

Mr Cope, who lives near Ilkley, was among the seven people who launched the business in 1989 and worked up from salesman to become managing director.

He bought into the business in 2002 and led its first management buyout in 2003, which was backed by private equity firm 3i in a deal valuing the company at £18m.

Two years later, 3i sold its stake to Dunedin, another buyout firm, in a deal that valued the business at £25m.

Then, in 2007, Dunedin sold out to Barclays Private Equity in a transaction that valued Zenith at £44m.

After several years of strong organic growth, Zenith completed its first acquisition in 2008 when it bought Provecta for an undisclosed sum.

Zenith customers include Philips, Santander, Asda, Mitie and NATS. The business employs 220 people at its base in a newly refurbished textiles mill in Calverley.