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CALGARY — Another rent-a-car brand is passing hands. Hertz Global Holdings has agreed to sell off their no-frills Advantage Rent-A-Car brand to Calgary-based Franchise Services of North America, Inc. (TSX-V:FSN). Australia's Macquarie Capital funded the $16 million deal for 49.76 percent of its equity stake. That's below half of the $33 million in 2009 that Hertz paid to pull Advantage out of bankruptcy.
The acquisition is a condition of a much bigger deal of Hertz, with its 8,100 locations, acquiring Dollar Thrifty Automotive Group for its offered $2.3 billion. It is only able to escape a federal antitrust kibosh on the deal if it jettisons Advantage. In turn, the completion of the Advantage acquisition is a condition precedent to the completion of the Hertz merger with Dollar Thrifty.
Advantage has 62 car rental locations in airports across the United States. Its would-be new owner, FSNA, already owns U-Save Car & Truck Rentals, Rent-A-Wreck of Canada, X-Press Rent A Car as well as Peakstone Financial Services. The acquisition expands upon FSNA's current leisure car rental presence, which previously consisted of 28 franchised airport locations operated under the U-Save Car & Truck Rental brand.
"Expanding our car rental footprint and running multi-branded companies will help to enhance the underlying value of the company for our shareholders. We also believe that in many instances, an opportunity will exist for our franchisees to expand their offerings and this will mean an incremental opportunity for our insurance divisions," said Tom McDonnell, Co-Chairman and Co-CEO of FSNA.
"We are pleased to partner with FSNA and Hertz to effectuate a transaction that is strategic for both companies," said Robert Bertagna, Global Head of Industrials, Macquarie Capital.