NEW YORK (Reuters) - Buying other rental car companies to grow the Hertz business is not the focus of its strategic plan, Kevin Conway, managing partner of private equity firm Clayton, Dubilier & Rice, said on Wednesday.
New York-based Clayton, Dubilier & Rice led the investor group that agreed to buy rental company Hertz from Ford (F.N: Quote, Profile, Research, Stock Buzz) last September for more than $15 billion including debt.
"Acquisitions are not a key part of our strategy," Conway said, speaking at the Reuters Hedge Funds and Private Equity Summit. "The (Hertz) strategy will be driven by operating improvement and building off the franchise that they already have."
"There is a big difference in performance between different locations. Some of which are structural, some of which are not," he said.
Conway said the firm's approach to Hertz is similar to the way it approached other investments, including copy company Kinkos and printer maker Lexmark, in terms of driving operational growth.
CD&R brought on former GE executive Jack Welch in 2001 to advise the New York-based firm and some of its portfolio companies.
While other private equity firms have grown in both deal size and number of deals and professionals, CD&R has remained a small firm, taking their time exploring transactions and trying to complete "zero to three" deals in a year, as Conway put it.
CD&R first explored the idea of buying Hertz three years before it sealed the deal, Conway said. The investor group included Merrill Lynch's private equity arm and the Carlyle Group.
The firm, founded in 1978, has 31 professionals in the U.S. and Europe and is currently investing a $4 billion fund. Continued...
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