Fox Rent-A-Car, the fourth largest car rental agency in the U.S., today announced completion of a new four-year $325 million senior credit facility led by Bank of America and a subordinated loan of $20 million provided by Harvest Capital.
Proceeds from the refinancing will be used to retire existing debt and provide the necessary working capital to fuel future growth for the company, according to Fox.
"As we continue to leverage off of the solid foundation that the owners of Fox have established, our new capital structure will enable Fox to continue to position itself as the leading value brand in the nation," said Richard Wolff, Fox Rent-A-Car’s chief financial officer. "The new credit agreement provides a flexible, longer-term capital structure to support the company's strategic plan, including expansion into key markets, continued investments in proprietary technology and optimizing operations.
“The owners have made a commitment to the long-term success for Fox. This is a major step in executing the company strategy. Additionally, the recapitalization of the company will lead to millions of dollars of annual savings comprised of interest and other operating efficiencies," added Wolff.
Bank of America Merrill Lynch led a syndicate of 10 financial institutions and provided the key support to facilitate and close the transaction team.
"We went through a detailed and thorough selection process to select the lead institution for this critically important transaction,” said Allen Rezapour, co-owner of Fox Rent-A-Car. “We are delighted that we selected Bank of America as our financial partner. The Bank of America team surpassed our expectation on their initial commitment. Harvest Capital stepped up and supported the recapitalization by providing subordinated debt."
"Fox Rent-A-Car is a great story of entrepreneurship, collaboration and innovation," said Kevin Trieber, senior vice president of global commercial banking at Bank of America Merrill Lynch. "We are proud to partner with their senior leadership in executing a financing solution that provides the company with significant flexibility, as well as the capital to support the growth associated with their strategic business plan. ..."
Financing for Fox Rent-A-Car represents Harvest Capital's 19th investment in 2014.
"We are proud to have partnered with Fox Rent-A-Car and its management team on this important refinancing and recapitalization transaction," said Richard Buckanavage, Harvest Capital's president and CEO. "Fox Rent-A-Car was an appealing opportunity for Harvest Capital due to its long track record of profitability, market leading position in the leisure segment of the rental car industry, along with a deep and experienced management team."