North Asia-focused private equity (PE) firm MBK Partners has agreed to pick up a 20.86 per cent stake in Hong Kong-listed Chinese car rental service provider CAR Inc for 1.8 billion yuan ($228 million), according to a filing with The Stock Exchange of Hong Kong on Tuesday.
CAR’s parent company UCAR has inked an agreement with MBK Partners’ subsidiary Indigo Glamour Company by which the latter will purchase 442.60 million shares from UCAR at price of HK$4 ($0.5) per share.
Upon the completion of the latest deal, UCAR will exit CAR. The transaction is expected to close before December 10, 2020.
Reuters had reported in August that MBK is leading a consortium that is holding acquisition talks with CAR. The investors had initially planed to purchase at least 28 per cent equity stake at more than HK$3.10 ($0.4) apiece.
In July this year, CAR entered into another agreement with state-backed Jinggangshan BAIC following which the latter invested up to 1.37 billion yuan ($207 million) in CAR for 440 million shares.
With offices in Beijing, Hong Kong, Seoul, Shanghai and Tokyo, MBK operates its PE business in China, Japan, and Korea. It manages over $22 billion in assets, counting investors such as global public pensions, sovereign wealth funds, financial institutions, corporate pensions, funds of funds, and foundations.
The 15-year-old MBK leverages its five sub-funds, including MBK Partners I, MBK Partners IV, and the Special Situations I fund, to make investments in financial services, telecom & media, consumer products, and manufacturing.
Some of its prominent portfolio companies in the Greater China region include national graduate entrance examination tutoring service firm Wendu Education Group, and the Hong Kong-based cinema operator CGI Holdings.
MBK had also invested in Shanghai-based car rental startup eHi Car Service in April 2019.
MBK has been looking to consolidate the dramatically growing auto rental market, as the market is forecast to surge to 150 billion yuan ($23 billion) this year, Reuters reported in August.
CAR, one of China’s largest auto rental groups, offers services comprising short- and long-term rentals, leasing, and chauffeur car services. CAR’s early-stage investors include Warburg Pincus, Lenovo Capital, Legend Capital, and Kleiner Perkins.