The take-private of Chinese leading auto rental service provider CAR Inc. by MBK Partners was awarded Private Equity Deal of the Year at the 2021 Mergermarket China M&A Awards.

MBK Partners decided on February 1 to acquire all the shares of CAR Inc held by UCAR Inc, another Chinese car-rental company, at a price of HK$4.00 per share. The PE firm announced on July 5 that the acquisition was completed with the privatization of CAR Inc. The privatization deal is valued at approximately US$1.1 billion and took less than 6 months from the launch to the completion, making it one of the landmark take-private cases on the Hong Kong Stock Exchange in recent years both in terms of transaction value and speed.

MBK Partners is one of the largest private equity funds in Asia, with more than US$25.4 billion of capital under management. It focuses on pan-Asian market holding mergers and acquisitions, with a particular preference for investing in industry leaders. Notable acquisitions include Godiva, a world-renowned chocolate manufacturer and retailer, Kuroda Electric, a leading independent distributor of electronic components in Japan, and Daesung Industrial Gas, the largest supplier of Industrial gases in South Korea. MBK Partners' latest move in China is to acquire nearly half of the 11 theme parks owned by Haichang Ocean Park, a Hong Kong-listed hospitality group.

CAR Inc. is the largest car rental enterprise in China in terms of fleet size, revenue and brand recognition, which is just in line with MBK Partners' investment preference. While having strong capital market resources, MBK Partners also has rich experience in investing in the car rental industry. It has played a vital role in the privatization of China's another large car rental company eHi Car Services and invested in South Korea's largest car rental company KT Rental.

MBK Partners' entry has injected strong impetus into the development of CAR Inc. in aspects like resources and management. Public information showed that since June this year, CAR Inc. has been upgrading its own fleet while strengthening cooperation with a third-party comprehensive tourism service platform. At the product level, it has launched a number of popular products aimed at the Generation Z, including the recent launch of the industry's first "Rental Pass" product. While improving product and service experience, CAR Inc. announced in late October to complete a total amount of nearly $100 million of note repurchase to optimize its debt structure.

China's growing car rental market also provides a broad vision for the cooperation of MBK Partners and CAR Inc. Analysys, a Beijing-based market research consultancy, estimated that the size of China's car rental market will amounted to 84.92 billion RMB in 2021, up 32.8 percent on a yearly basis. The volume is expected to top 100 billion RMB to reach 106 billion RMB till 2022, soaring 25 percent over 2021.

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