Movida engages worldwide enlargement with acquisition in Portugal
- September 23, 2022
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Rental company of the Simpar group announces the acquisition of the Portuguese car rental company Drive on Holidays for €55 million, paving the way for its arrival in Europe
A vehicle rental, fleet management and used car sales company of the Simpar group, Movida is kicking off its internationalization plan and has chosen Portugal as its first destination.
To mark its arrival in the country, the company announced on Wednesday, September 21, the purchase of local car rental company Drive on Holidays, paying €55 million. The agreement was closed through the subsidiary Movida Finance, in an operation whose enterprise value was set at €66 million, considering net debt of €11 million.
Under the terms of the transaction, of the total agreed, €52.5 million was paid to the sellers and €2.5 million was withheld for possible damages.
“This acquisition is part of our strategic planning for the internationalization of Simpar and Movida”, says Renato Franklin, CEO of Movida, to the NeoFeed. “As we have already told our investors, we want to have part of the revenue in hard currency, dollar or euro.”
Based in Lisbon and in the market for 11 years, Drive on Holidays has four stores close to the main Portuguese airports and a fleet of approximately 3,300 vehicles.
With the acquisition, Ricardo Esteves, one of the company’s founding shareholders, will remain as the company’s chief executive, which will continue to operate independently. The agreement also provides for the maintenance of the rental company’s 130 employees.
According to Franklin, what caught the attention of Movida and Simpar at Drive on Holidays was the good level of services provided by the company, along with its low operating cost and good financial performance.
Data released by Movida shows that, between July 2021 and June this year, Drive on Holidays recorded net revenue of €20.2 million, Ebitda of €16.3 million, net income of €6.7 million and net debt. of €11 million.
“It was a way we found to set foot in Europe, through Portugal, with a company that is working and delivering”, says Franklin.
Internationalization is a priority for Simpar companies, which gave its M&A team a mandate to expand the holding company outside the country, through acquisitions and alliances. The idea is that, in five years, about a third of the group’s revenue will be generated in hard currencies.
This path is also a priority move for Movida’s main competitors. In an interview with Conectação CEO last year, Luís Fernando Porto, CEO of Unidas, pointed out that one of the issues that motivated the merger with Localiza was the fact that the agreement opened doors to other vehicle rental markets besides Brazil. Localiza already operates in four countries in South America, with 81 franchises.
The choice of Movida for Portugal is due to the fact that the country speaks the same language and has cultural similarities with Brazil, which enhances the capture of synergies in the administrative sphere.
The country also has a significant flow of tourists, many of them Brazilian, in addition to being a small, fragmented and underpenetrated market when it comes to car rental. This will allow Movida to bring new business fronts, such as fleet management and vehicle subscription.
“It’s a business similar to what we had at the beginning of Movida, when we brought more customers to the car rental market without fighting with competitors. That’s what we imagine you can do in Portugal”, says Franklin.
In this first scale, the priority of Movida’s internationalization plan is the strengthening of Drive on Holidays, focusing on improving the execution of services, investments in technology and service to improve the customer experience.
“We believe this brings more demand,” says Franklin. “With this, you can grow your fleet, maintaining or improving profitability, gaining scale. That is the main objective, to be a reference in terms of services in Portugal.”
Movida’s shares closed today’s trading session with a drop of 2.67%, at R$13.12. In the year, the papers accumulated a fall of 16.8%. The company’s market value is R$ 4.8 billion.
In the second quarter, the company recorded a net income of BRL 186.8 million, an increase of 7.4% compared to the same period in 2021. On the same basis of comparison, revenue grew 89.8%, to BRL 2 .4 billion, and Ebitda rose 2.3 times, to R$ 905.3 million.