Loxam’s CEO Gérard Déprez said the main benefit of the proposed acquisition of Ramirent – announced earlier this week – would be increased geographical diversification and security of earnings.
Speaking exclusively to IRN, Déprez said; “Two years ago, 80% of Loxam’s business was in France. We had some pressure not to put all our eggs in one basket. With the move with Lavendon, the proportion of our business in France decreased to 60%. And now it will be 40%. So, it means we are more comfortable with the stability of our company.”
He said there would not be significant cost savings in combining the two businesses; “We will keep the same management, the same structure - it will be a decentralised company. So, my interest is not to get synergies, but just to have more visibility and diversity of our revenue; to be more comfortable and not depend too much on a particular market.”
Déprez, who confirmed it was Loxam that initiated the agreement, dismissed the fact that the combined business would be three times the size of its nearest European competitor, with greater market power; “You consider it now as three times bigger, but don’t worry, we are in a consolidating market. Yes, in July we will be three times the size, but I can imagine consolidation will continue, and companies will continue to grow, and the difference of size will change.”
Asked if he was confident about Loxam’s debt position after the deal, he told IRN; “We are comfortable with our strategy and with our indebtedness. After such a move, we will be committed to decreasing our debt ratio, but it’s more attached to the economic situation…It is a paradox of our business: when business is good, debt increases; when business is not good, debt will decrease.”
Ramirent’s board and main shareholders have accepted Loxam’s €9.00 per share offer. Loxam is scheduled to publish a tender document on or around 19 June, and its offer will expire approximately a month later.
The full interview will appear in the July-August issue of IRN.