Bidding for Hertz: Leveraged Buyout Case Solution

In August 2005, The Carlyle Group and its partners (Clayton, Dubilier & Rice and Merrill Lynch Global Private Equity) to finalize the terms of an offer for the Hertz Corporation. Ford Motor Company had set Hertz, a wholly owned, sold in April 2005 and June 2005, entered into a two-way process, resulting in the sale or an initial public offering (IPO). The case provides detailed pro forma transaction that allow students to explore the synergies of the transaction and assess the value and Hertz offer projections. Students should ask themselves if their offer provides an adequate return for sponsors, may produce greater value for Hertz possible IPO, and can provide the best of a caller group rival bids. The case is suitable for use in courses on corporate finance, private equity, or the assessments. Due to the wide range of topics that can be considered, if also works well as a crowning event or contest case. For educators to provide students with an overview of the role and practices of private capital, it is recommended to combine the event with fellow Hertz LBO, “Investing in IPOs Sponsor-Fort: The case of Hertz” (UV1409) . Hertz IPO was announced in July 2006, seven months after the LBO was completed. Both cases cover a wide range of issues that arise during the entry and exit of private equity investment.
Susan Chaplinsky,
Felicia C. Marston
Source: Foundation of the University of Virginia Darden School
21 pages.
Date Posted: February 17, 2009. Prod #: UV1056-PDF-ENG
Tender Hertz: Solution Leveraged buyout case

Bidding for Hertz: Leveraged Buyout Case Solution
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