Addison Lee Group has confirmed it entered into a new long-term funding arrangement with a consortium of investors, led by Cheyne Capital and Liam Griffin, to support the future of its UK business.
TheChauffeur.com reporter Chris Hargreaves reports on the sale…
At a time when the industry is being hit hard by the COVID-19 virus with heavy restrictions on global travel, the global pandemic hasn’t held up the completion of the sale of the world’s largest managed ground transportation service supplier.
Today, 25 March 2020, following receipt of customary approvals, The Carlyle Group has concluded the sale of Addison Lee. The news follows last month announcement that The Carlyle Group had reached agreement to sell the UK business, however, Addison Lee’s US business was sold separately to RMA Worldwide Chauffeured Transportation for an undisclosed sum.
Cheyne becomes the Group’s largest shareholder and Liam Griffin, who was a non-executive director and shareholder, has now returned as CEO, replacing Andy Boland, who has led the business for the last four and a half years. Griffin and Cheyne SVC’s combined holdings give them a majority stake in the business, in a deal that sees at least £41 million of new investment flow into the firm
Under the new arrangements, Addison Lee’s overall debt will be more than halved, and substantial aforementioned new capital made available to the business. “This will provide the business with additional funding and an appropriate capital structure to enable further growth, investment and support cash generation”, a spokesperson for the company said.
Under Carlyle’s ownership, Addison Lee has seen Group revenues increasing from £225 million in the year ended August 2013 to around £390 million 2019. Despite the growth in revenue, Addison Lee reported losses of £39million in 2019, after factoring in depreciation, amortisation, and debt servicing (including non-cash interest on shareholder loans). That came after losses of £20.8million the year before, as they desperately attempted to compete with ride-sharing companies entering the market.
Liam Griffin, said: “Whilst new entrants and technology may have changed over my 25 years with the business, what our passengers want remains the same. They are still drawn to Addison Lee’s values of quality, trust and, of course, choice.
“We were the world’s first company to develop a taxi app and we’ve continued to invest in our technology, ensuring the Addison Lee experience is even more accessible and flexible to its customers. I couldn’t be more excited to be helping write the next chapter in our history.”
“Given the current situation, our immediate focus is to ensure we support drivers so they can continue to provide a safe and reliable travel option to get key workers and essential goods to where they need to be. We are committed to playing our part in helping the government in its efforts to manage the situation.”
Andy Boland, Chief Executive, Addison Lee Group said: “This is a great moment for the future of Addison Lee with agreement on a new capital structure for the UK to support growth, and a new US owner to help take the American business to the next stage.
“Thanks to our partnership with Carlyle and their investment in the business, Addison Lee has a strong operations and technology platform supporting an unrivalled franchise with business customers in the UK – all underpinned by our first-class workforce and fleet of driver partners”.
Anthony Robertson, CIO of Cheyne Strategic Value Credit said: ““We’re very pleased to be investing in the future of Addison Lee. The new group structure will enable Addison Lee to be focused on its core UK market, with the objective of further consolidating its leadership position in the corporate sector to deliver enhanced profitability and cash flow. We will build on the strength of the underlying business by further enhancing the customer experience and supporting the driver community.”
“We are confident that these measures will allow us to further consolidate Addison Lee’s dominant position in the corporate sector and deliver enhanced profitability and cash flow.”
RMA (Robert M. Alexander) Worldwide Chauffeured Transportation and the business will now continue to operate in North America as a partner under the Addison Lee brand. In a statement Addison Lee said: “The acquisition of Addison Lee US by RMA represents a strategic opportunity to build a US leader in premium ground transport through the geographic and service consolidation between the two businesses.
“The next stage of development requires further operational scale. This combination will provide RMA with a footprint that reaches from Boston to Virginia, by way of New York State and Delaware. This represents a strategic opportunity to build a US leader in premium ground transport through the geographic and service consolidation between the two businesses.
“Following investment in the Addison Lee US business under Carlyle ownership, the next stage of development requires further operational scale”.
As part of the deal with RMA, Addison Lee UK has also agreed a long-term strategic partnership, whereby international bookings to the US or UK will be fulfilled by each of the respective partners in order to support customers’ international travel needs.
Addison Lee stated the new consortium will focus on consolidating its position in the core London-centric market.
