Through The Fly's Eyes: Hertz Global Holdings

from Theflyonthewall.com







A Huge Private Equity Deal Comes Public

Hertz Global Holdings, the rental car business, which was purchased by private equity less than a year ago, is now going public. Hertz looks to raise $1.5 billion and expects to price the deal between $16 and $18 per share.

This will be one of the highest profile private equity deals to go public. If Hertz does well, private equity may rush to monetize other investments.

The deal looks pretty good. While at first glance, Hertz looks very leveraged, much of the debt is used to finance the purchase of automobiles and as long as the debt matches up with the useful lives of the cars, it should be manageable. In addition, the proceeds of the equity offering and the refinancing of much of the debt should meaningfully improve the balance sheet.

Often the first few deals are the best on Wall Street. With Hertz being one of the first private-equity high-profile names to go public, this deal looks like it is attractively priced. Buy this one before the junk deals get dumped on the public.