Dollar Thrifty Automotive Group Inc. (DTG)
August 27, 2012 9:00 am ET
Leslie Hunziker - Staff Vice President of Investor Relations
Previous Statements by DTG
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Mark P. Frissora - Executive Chairman, Chief Executive Officer, Member of Executive Committee, Chairman of Hertz Corp and Chief Executive Officer of Hertz Corp
Scott L. Thompson - Chairman, Chief Executive Officer and President
Elyse Douglas - Chief Financial Officer and Executive Vice President
Brian Arthur Johnson - Barclays Capital, Research Division
Christopher Agnew - MKM Partners LLC, Research Division
Yejay Ying - Morgan Stanley, Research Division
Michael Millman - Millman Research Associates
Richard M. Kwas - Wells Fargo Securities, LLC, Research Division
John M. Healy - Northcoast Research
Fred T. Lowrance - Avondale Partners, LLC, Research Division
Welcome to the Hertz Global Holdings and Dollar Thrifty's Joint Conference Call. The companies have asked me to remind you that certain statements made on this call contain forward-looking statements. Forward-looking statements are not guarantees of performance and by their nature are subject to inherent certainties. Actual results may differ materially from those expressed in forward-looking statements due to many factors. These factors include, among other matters, those that each of the companies have noted in their joint press release regarding the acquisition issued yesterday and in their latest earnings releases and filings with the SEC. Any forward-looking information relayed on this call speaks only as of this date, and the company undertakes no obligation to update that information to reflect changed circumstances.
The tender offer has not yet commenced, and this call is neither an offer to purchase nor a solicitation of an offer to sell shares of Dollar Thrifty's common stock. At the time of the tender offer is commenced, Hertz will file a tender offer statement and Dollar Thrifty will file a solicitation recommendation statement on Schedule 14D-9 with the SEC. Investors and stockholders of Dollar Thrifty are urged to read all documents carefully and in their entirety when they become available because they will contain important information about the proposed transaction. These documents will be available for free at the SEC's website, sec.gov. Copies of Hertz's filings with the SEC may be obtained from Hertz's website at hertz.com/investorrelations or by directing a request to Hertz at (201) 307-2100. Copies of Dollar Thrifty's filings with the SEC will be available free of charge on Dollar Thrifty's website at dtag.com or by contacting Dollar Thrifty's Investor Relations Department at (918) 669-2119. Additional information concerning these statements is contained in the company's joint press release regarding the acquisition issued yesterday and in the Risk Factors and Forward-Looking Statements section of the companies' respective 2011 Form 10-K and 2012 quarterly report. Copies of these filings are available from the SEC, the Hertz's and Dollar Thrifty's websites or the companies' respective Investor Relations departments.
I would like to remind you that today's call is being recorded and is also being made available for replay starting at 12:30 p.m. Eastern today, running through September 10, 2012.
I would now like to turn the call over to our host, Leslie Hunziker. Please go ahead.
Good morning, everyone. By now, I'm sure you've all seen our press release announcing Hertz's offer to acquire Dollar Thrifty. This morning, management will provide a brief overview of the acquisition terms and strategic rationale, and we'll then open up the call to your questions. We've provided slides to accompany this conference call that can be accessed on our website at hertz.com and on Dollar Thrifty's website at dtag.com. On the call today for Hertz in Park Ridge, New Jersey, is Mark Frissora, Chairman and CEO; Elyse Douglas, CFO; and Jeff Zimmerman, General Counsel and Corporate Secretary. And in Tulsa, Oklahoma, we have Dollar -- from Dollar Thrifty, we have Scott Thompson, Chairman and CEO; Cliff Buster, CFO; and Vicki Vaniman, General Counsel.
Again, I'll turn it over to Mark.
Mark P. Frissora
Good morning, everyone, and thank you, Leslie. At last, we're in the home stretch of closing on what will be important brand additions to our rental car business. It goes without saying that this is a transformational deal that will allow Hertz to benefit significantly from the growth prospects and operational efficiencies of a much larger business and a best-in-class operation.
Let's start with the transaction highlights on Slide 5. As you know by now, we are acquiring Dollar Thrifty for $87.50 per share, all cash, or a corporate enterprise value of $2.3 billion. This represents a multiple of 7.8x the midpoint of Dollar Thrifty's EBITDA guidance for 2012, which is $298 million. This multiple equates to a roughly 40% premium to the current Hertz and Avis average multiple. Our offer has no financing contingency but is predicated on our obtaining antitrust clearance. We expect the transaction to be accretive to our diluted net earnings per share in 1 -- in year 1 and EVA-positive after synergies by the end of year 2. This is in spite of the loss of about $30 million of 2012 corporate EBITDA from the Advantage asset divestiture. Based on best-guess estimates, we anticipate the deal closing sometime in the fourth quarter. I'll walk you through the timing of the process in just a minute.
But before I do, I want to say that we're very pleased with the outcome of our recent negotiations with Dollar Thrifty and its board and believe that the transaction terms and structure provide premium value for both companies' shareholders. We're also excited to welcome Dollar Thrifty's employees to our team. We know our collaborative efforts will make the Hertz-Dollar Thrifty combination the best among industry competitors. Would you agree, Scott?