Both Freehills and Minter Ellison were involved in the US$2.9 billion ($3.9 billion) financing of the US$15 billion ($20 billion) buy out of the Hertz Group, one of the largest ever global leveraged buy out transactions.
Minter Ellison, led by David Inglis, acted for Hertz’s parent company, Ford Motor Company, advising on the Australian law issues of the sale and the Hertz restructure. The firm also acted for the purchasers — Clayton, Dubilier & Rice Inc, The Carlyle Group and Merrill Lynch Global Private Equity — on refinancing Hertz Australia on the acquisition, which involved bridge financing pending a proposed securitisation. Ralph Ayling led this part of the transaction.
Freehills worked with Gide Loyrette Nouel and White & Case in acting for the bridge lenders to the buyers — BNP Paribas, The Royal Bank of Scotland and CALYON. Tessa Hoser and Wendy Gwyn led the Freehills team on the Australian leg of the transaction, which required both bridge and potential securitisation phases to be accommodated within a structure that allowed access to the fleet rental assets and cash flows of the Hertz Australia Group without upsetting its day-to-day operations.
Minter Ellison’s David Inglis said the transaction was completed to a tight timeframe, at one of the busiest times of the year — it was settled just before Christmas. “The interesting thing was working with PricewaterhouseCoopers in the US and making sure that all Australian aspects, from a structuring and regulatory point of view, were in place for the worldwide closing.”
Hoser said the deal was a “graphic example of the potential of debt capital markets to work hand in hand with the leveraged finance market in funding these types of deals”. The firm was involved in acting for the banks in financing the acquirers of the Hertz Group globally, “so there were about 12 different countries involved”, she said.
The financing was completed through arrangements that included a special purpose borrower.
Gwyn said the process was also complicated by the need to ensure Hertz had the flexibility it needed in its business while also affording the banks protection. The global facilitation meant all jurisdictions had to review and tailor a common financing document to ensure that the local requirements were met within the financing and security structure.