Monday, October 30, 2006

PE firms to cash in on Hertz IPO

Less than a year after they bought Hertz Global Holdings Corp., its three private equity backers are poised to take it public at a valuation that would yield a 150% partially realized gain on their investment.
The car rental giant filed an amended prospectus Friday, setting a target price range of between $16 and $18 a share for the initial public offering. At the midpoint of that range, the IPO would raise about $1.72 billion, including the overallotment — far more than the $1 billion originally projected.
Of that, $426.8 million would be used to fund a dividend to its owners, Clayton Dubiler & Rice Inc., Carlyle Group and Merrill Lynch Global Private Equity. The balance, about $1.4 billion after fees and commissions, will be used to pay down debt incurred earlier in the year to fund a $1 billion dividend for the sponsors.

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