The Firm is representing Ford Motor Company and The Hertz Corporation in connection with the $5.6 billion sale of Hertz to a consortium of private equity firms consisting of Clayton Dubilier & Rice, The Carlyle Group and Merrill Lynch Global Private Equity. The transaction was announced on September 12, 2005 and followed a spirited auction between the winning consortium and a second group of private equity firms.
Hertz, a wholly owned subsidiary of Ford, has between $9 and $10 billion in outstanding debt, almost all of which will be refinanced, so that the overall value of the transaction is approximately $15 billion, making it the largest LBO on an enterprise value basis since RJR Nabisco in 1989.
In connection with the transaction, Hertz plans to commence a cash tender offer for up to $2.3 billion of certain of its outstanding debt securities, and Ford Motor Credit has announced that it plans to file with the Securities and Exchange Commission a registration statement to offer to exchange debt securities of Ford Motor Credit for up to $2.4 billion of other debt securities of Hertz.
Ford and Hertz had also engaged Simpson Thacher to work on a possible initial public offering of Hertz. The IPO had cleared the SEC, and the road show was scheduled to begin when the sale transaction was announced.
The Simpson Thacher attorneys working on the transaction include: M&A – David Sorkin, Peter Malloy, Doug Bacon, Adam Corndorf and Grenfel Calheiros; IPO and Tender & Exchange Offers – Alan Schnitzer, Michael Coke and Frederick Lee; Credit and Asset-Backed Finance – Laura Palma and Jay Ptashek; Tax – Steve Todrys, Jonathan Cantor and Thomas Gray; Employee Compensation & Benefits – Ken Edgar and Aimee Adler; Litigation – Paul Curnin and Michael Garvey; Insurance Regulation – Steven DeLott; Intellectual Property – Jennifer Rackoff; Environmental – Adeeb Fadil, Michael Isby and Timothy Mulvihill; Labor – Scott Dyer and Rebecca Clar and Paralegals – Emma Herries and Lindsey Cei.