PARSIPPANY, N.J., PRNewswire-FirstCall/ -- Avis Budget Group, Inc. announced today that it has acquired a significant interest in Carey International Inc., the leading provider of chauffeured ground transportation services worldwide. In connection with this transaction, Avis Budget Group invested approximately $60 million in cash and now owns approximately 45 percent of Carey's common stock. In addition, Avis Budget also obtained a one-year option to increase its ownership stake in Carey to approximately 80 percent, subject to certain conditions, which would likely include the assumption or repayment of Carey's existing indebtedness.
Carey International, with approximately $250 million in revenue in 2006, is the market share leader in the approximately $5 billion chauffeured ground transportation category. Carey offers its customers consistently superior premium service through the industry's only franchise system. Carey operates in 550 cities and 60 countries through its network of franchisees and alliance partners.
Avis Budget Group funded its investment with cash on hand and the investment is not expected to have a material impact on fourth quarter 2007 results.
"With this investment, Avis Budget Group expects to be able to offer corporate customers and travel partners the most complete portfolio of local ground transportation products and services available anywhere," said Avis Budget Group Chairman and Chief Executive Officer Ronald L. Nelson. "As the world's premier chauffeured services brand, Carey provides premium-quality services across a broad geographic footprint, making it an ideal partner for Avis Budget."
Carey International will continue to be led by its existing management team, including President and Chief Executive Officer Gary L. Kessler and Executive Vice President and Chief Financial Officer Mitchell J. Lahr, based out of Carey's offices in Washington, D.C. Carey's existing investor group, led by Chartwell Investments, continues to hold a majority ownership position.
"We are tremendously excited about our new relationship with Avis Budget Group," Mr. Kessler said. "The opportunities for us to leverage Avis Budget's strong customer relationships, technological capabilities and vehicle services expertise will allow us to enhance service delivery to our clients and strengthen our position as the leader in the chauffeured transportation industry."
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