SG Fleet Group and NLC unite for A$200m

SG Fleet Group has acquired the novated and vehicle procurement specialist NLC for A$200 million (R2 billion).

The acquiring company is the Australian Stock Exchangelisted subsidiary of JSE-listed transport logistics and mobility group, Super Group.

The acquisition price includes A$46m in cash on NLC’s balance sheet, equating to an enterprise value of A$154m.

NLC managing director Matt Reinehr has agreed to receive 9.1m SG Fleet shares as part of the purchase consideration. The balance of the acquisition would be funded through an increase in debt and cash on hand.

Super Group chief executive Peter Mountford said yesterday the transaction would strengthen SG Fleet’s position in the novated and private leasing markets significantly.

SG Fleet is expecting cash earnings per share accretion in its first full year of ownership of more than 25 percent, with further accretion in subsequent years.

The acquisition is scheduled to be completed before the end of this calendar year, with November 30 the effective date of the transaction.

NLC, which has been at the forefront of novated product development and consumer vehicle finance since its establishment in 1990, has its headquarters in South Melbourne.

It has a national presence in Australia and employs about 140 staff.

Robbie Blau, SG Fleet chief executive, said both the NLC and SG Fleet brands would be retained as each had specific products, expertise, sales approach, customers and scale.

Formidable blend

“Both companies have established positions in the market. They make for a formidable blend of products and expertise,” said Blau.

NLC founder Reinehr and his management team will remain with the business.

Blau said NLC was a strong business with diversified revenue streams, a quality, sticky customer book and a highly regarded management team.

“In the industry, NLC is recognised for its ability to win and retain customers and achieve strong margins and sustainable growth.

“Those qualities make this a strategically attractive and financially compelling deal,” Blau said.

“The acquisition balances our business portfolio and firmly extends our leadership in the fleet management business to the novated segment.”