MBK, Baring Asia agree $937m take-private for China's eHi

An entity called Goliath Advisors submitted a take-private offer for the company last November of $13.35 per American Depository Share (ADS), a 15.4% premium to the previous close. It was announced in early January that MBK and Ruiping Zhang, founder, chairman, and CEO of eHi, had made an identical bid.

The board has now accepted an improved offer from them of $13.50 per share, according to a filing. Baring has already agreed to acquire a stake of 29.6% – with 37.5% in voting power – from Tiger Global Management. Redstone Capital Management is also participating as a new investor.

Ocean Link, a travel and tourism-focused PE firm established with backing from Chinese online travel agency Ctrip, another eHi shareholder, is not listed as a consortium member, although it did recently buy a 6.5% interest in the company for $66.3 million from CDH Investments. The GP did this in support of its own take-private offer of $14.50 per share. It is unclear why this bid did not proceed.

The transaction will be financed with equity from MBK and Baring, while Zhang will roll over his stake of around 6% alongside fellow existing investors Crawford Group – parent of Enterprise Holdings, which owns US-based Enterprise Rent-A-Car and National Car Rental – and Dongfeng Asset Management. Morgan Stanley and Deutsche Bank have also agreed to provide $200 million in debt.

As of March 2017, Ctrip had a 13.9% equity stake in eHi, while Crawford and Tiger Global had 13.4% and 11.9%, respectively. CDH, Goldman Sachs, Ignition Partners, and Qiming Venture Partners, all of which invested in the company prior to its 2014 IPO, had smaller holdings. Hedge fund SRS Partners is another significant investor, having participated alongside Tiger Global in a $134 million share placement in 2015.

EHi was founded in 2006 and has grown into a network of more than 2,500 service centers across 200 cities with in excess of 40,000 vehicles. The company offers individual car rentals and partners with businesses that operate in China, with both self-drive and chauffeured car options available. It has strategic partnerships with Enterprise Holdings and Ctrip. In 2015, China Development Bank agreed to provide RMB1.5 billion ($238 million) in debt financing.

Revenue for 2016 came to RMB2.11 billion, up from RMB1.45 billion the previous year. Over the same period, net profit fell from RMB696.3 million to RMB33.1 million.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• Technology
• Consumer
• Buyouts
• China
• MBK Partners
• Baring Private Equity Asia
• Ocean Link
• Transportation