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Europcar Plans to Sell Almost $1 Billion of Shares in Paris

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Europcar Group SA, the auto-rental company owned by Eurazeo SA of France, is selling 854.5 million euros ($961 million) of stock in a Paris initial public offering to fund growth and match expansion by the car-sharing industry.

Eurazeo and a related investor will offer 379.5 million euros worth of the shares, with the rest being issued by the company, Europcar said in a statement Monday. The shares are being offered at 11.50 euros to 15 euros each, with a price to be set June 25, according to the statement.

Europcar will have an equity value of 2.04 billion euros at the top of the price range, said two people with knowledge of the matter. The company will use the proceeds to reorganize its balance sheet and reduce debt levels to below 1.5 times this year’s estimated corporate earnings before interest, taxes, depreciation and amortization, Chief Executive Officer Philippe Germond said in an interview this month. Europcar’s net debt was 3.32 billion euros as of the end of March.

French companies have raised about $2.5 billion from IPOs this year, the largest being the $1.3 billion sale of engineering services business Spie SA, data compiled by Bloomberg show.

Europcar, which Eurazeo acquired for 3.1 billion euros including debt in 2006, competes with rental companies such as Avis Budget Group Inc., Enterprise Rent A Car, Hertz Global Holdings Inc. and Sixt Rent A Car.

U.S. Consolidation

The company is facing a narrower set of U.S. car-rental competitors following consolidation in that market. Hertz’s $2.6 billion acquisition of Dollar Thrifty Automotive Group Inc., agreed in 2012, shrank the number of major rental-car firms in the U.S. to three from four. The European market is worth about 12.4 billion euros, according to 2013 data from Euromonitor.

Germond said Europcar’s business has not been affected by the growth in recent months of car-sharing and rental companies like Autolib, backed by French billionaire Vincent Bollore, and San Francisco-based Uber Technologies Inc. Automakers are also offering car-sharing services, including BMW AG’s DriveNow short-term rental business and Daimler AG’s Car2Go, which provides fleets of two-seat Smart cars.

Europcar operates through 3,650 rental locations in more than 140 countries, according to its website. It has the largest share of Europe’s rental market with about 19 percent, compared with 13 percent for Avis and 12 percent for Hertz, according to figures from 2013 included in the IPO filing.

Deutsche Bank AG, Goldman Sachs Group Inc. and Societe Generale SA are among the banks managing the IPO.

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