Private equity firm Equistone Partners has taken a majority stake in one of Scotland’s largest vehicle hire firms as part of a buyout deal.
Livingston-based Coralinn – Scottish entrepreneur Hugh Stewart’s investment firm – and GMG Asset Management have both agreed to sell their 25 per cent stakes in TOM Vehicle Rental, which is based in Airdrie.
TOM represents a great addition to Equistone’s UK portfolioTim Swales
The buyout is also likely to see a multi-million pound windfall for TOM founder Jim Rafferty, although he retains a holding in the business alongside its management team.
Although the terms of the deal have not been disclosed, Equistone’s typical minimum investment in a business is around £20 million.
Established by Rafferty in 1991, TOM specialises in the long-term hire of vans, trucks, trailers and cars to some 900 public and private sector customers.
It employs more than 500 staff and has about 11,000 vehicles within its fleet across six hire sites in Scotland and five in England. It also operates a commercial vehicle dealership across five locations selling Mercedes-Benz and Citroen vehicles. The group generated revenues of £213m in the financial year ending March 2016.
Equistone said its investment will support the company’s “ongoing organic and acquisitive growth plans to further increase its market share within the UK vehicle rental sector”.
Tim Swales, Equistone partner, said: “TOM has a strong business model, a compelling growth trajectory, and a highly regarded, dynamic management team with an impressive track record.
“It represents a great addition to Equistone’s UK portfolio and we’re delighted to have backed the company.”
Robert Stewart, chief executive of TOM, said: “Equistone’s investment is transformational for our business, in terms of both the financial backing and the increased executive team bandwidth it provides.
“This additional support will allow us to accelerate the ambitious expansion in our market share, number of UK locations, fleet size, customer base, and rental service offering.”
Swales and fellow Equistone partner Paul Harper will join the board of TOM. According to TOM’s website, the business was founded by Rafferty as an MOT specialist in 1991 with his wife, sons and daughter and sisters are all involved in the business. TOM was one of the first investments through Coralinn for Stewart who was behind Caledonian Alloys.