Hertz 2009 Annual Report Download - page 24

ITEM 1. BUSINESS (Continued)
or collectively, the ‘‘Sponsors,’’ acquired all of Hertz’s common stock from Ford Holdings LLC, or ‘‘Ford
Holdings,’’ for aggregate consideration of $4,379 million in cash, debt refinanced or assumed of
$10,116 million and transaction fees and expenses of $447 million.
In January 2009, Bank of America Corporation, or ‘‘Bank of America,’’ acquired Merrill Lynch & Co., Inc.,
the parent company of Merrill Lynch Global Private Equity, or ‘‘MLGPE.’’ Accordingly, Bank of America is
now an indirect beneficial owner of our common stock held by MLGPE and certain of its affiliates.
Common Stock Offerings
In November 2006, we completed our initial public offering of 88,235,000 shares of our common stock.
In June 2007, the Sponsors completed a secondary public offering of 51,750,000 shares of their Hertz
Holdings common stock. In January 2009, Bank of America Corporation, or ‘‘Bank of America,’’
acquired Merrill Lynch & Co., Inc., the parent company of MLGPE. Accordingly, Bank of America is now
an indirect beneficial owner of our common stock held by MLGPE and certain of its affiliates. In May and
June 2009, we completed a follow-on public offering of 52,900,000 shares of our common stock at a
price of $6.50 per share with proceeds before underwriting discounts and offering expenses of
approximately $343.9 million, or the ‘‘Common Stock Public Offering.’’
In addition, in May 2009 we entered into subscription agreements with investment funds affiliated with
CD&R and Carlyle to purchase an additional 32,101,182 shares of our common stock at a price of $6.23
per share (the same price per share paid to us by the underwriters in the Common Stock Public Offering)
with proceeds to us of approximately $200.0 million, or the ‘‘Private Offering.’’ The Private Offering
closed on July 7, 2009 and the 32,101,182 shares of our common stock were issued to the CD&R and
Carlyle affiliated investment funds on the same date. Giving effect to the Common Stock Public Offering
and the Private Offering, the Sponsors’ ownership percentage in us is approximately 51%.
In May and June 2009, we also completed a public offering of an aggregate principal amount of
$474,755,000 of 5.25% convertible senior notes due 2014, or the ‘‘Convertible Debt Public Offering.’’
We used the net proceeds from the Common Stock Public Offering, the Private Offering and the
Convertible Debt Public Offering, collectively the ‘‘2009 Hertz Holdings Offerings,’’ to increase our
liquidity and for general corporate purposes, including the repayment of principal amounts with respect
to debt under the fleet financing facilities of certain of our consolidated subsidiaries.
Our Markets
We operate in the global car rental industry and in the equipment rental industry.
Worldwide Car Rental
We believe that the global car rental industry exceeds $35 billion in annual revenues. According to Auto
Rental News, car rental revenues in the United States are estimated to be approximately $21 billion and
have declined in 2009 by 4.8%. We believe car rental revenues in Europe account for approximately
$14 billion in annual revenues, with the airport portion of the industry comprising approximately 40% of
the total. Within Europe, the largest markets are France, Germany, Italy, the United Kingdom and Spain.
We believe total rental revenues for the car rental industry in Europe in 2009 were approximately
$10 billion in nine countries—France, Germany, Italy, the United Kingdom, Spain, the Netherlands,
Switzerland, Belgium and Luxembourg—where we have company-operated rental locations and
approximately $2.4 billion in eight other countries—Greece, Ireland, Portugal, Sweden, Norway,
Denmark, Austria and Finland—where our brand is present through our licensees.
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