Bain Capital and ADIA Acquire Merchants Fleet

Bain Capital and a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) signed a definitive agreement to acquire Merchants Automotive Group, which does business as Merchants Fleet and Merchants.

The members of the Merchants leadership team will remain in their current roles and will be co-investors in the business, with CEO Brendan P. Keegan assuming the roles of president and chairperson.

Terms of the private transaction were not disclosed. The transaction is subject to customary regulatory and other approvals and is expected to close in Q3/22.

Founded in 1962, Merchants is a provider of fleet management services with more than $2 billion in assets under management and 165,000 managed commercial fleet units across North America. Merchants will continue to operate independently.

“When we initially provided growth financing to Merchants in 2020, we had our eye on a longer-term partnership,” Olof Bergqvist, managing director at Bain Capital, said. “As the fleet management industry continues to experience considerable disruption, we are excited to continue to support Brendan and the Merchants team on their path of consistent long-term growth driven by connected vehicles, multi-modal transportation, efficiency requirements and data-driven intelligence.”

“Merchants is at the forefront of electric vehicle expansion as more companies look to improve their ESG performance,” Julia Levinson, vice president at Bain Capital, said.

Merchants touts existing reservations for 40,000 electric vehicles, marking an investment and commitment of $2.5 billion.

“The growth Merchants has achieved over the past five years is unrivaled in the industry, and the new ownership group — Bain Capital, ADIA and our leadership team — share a steadfast commitment to keep our clients on the cutting edge of commercial fleet through continued innovation,” Keegan said. “The infusion of new capital affirms the merits of our core values and disruptive approach. While other providers grapple with the effects of a consolidating market — business interruption, systems integration, confusion and employee impacts — Merchants moves forward fearlessly at the vanguard of fleet and mobility with best-in-class solutions for fleet electrification, fueling technology and last mile. There’s never been a better time to work for, or work with, Merchants.”

“Merchants is an innovative, growing business and, along with our fellow investors, we support the leadership team’s vision for the future of the company,” Hamad Shahwan Al Dhaheri, executive director of the private equities department at ADIA, said. “Commercial fleet leasing is an area we understand well, having previously and successfully invested in the sector. Our investment in Merchants aligns with our approach of backing strong, proven management teams in executing growth strategies in sectors and markets where we have built strong conviction.”

“Since my father, Irving Singer, founded Merchants in 1962, we have grown alongside our clients through innovation and developing new service offerings,” Gary Singer, outgoing chairman and owner of Merchants, said. “Today’s news reflects decades of industry leadership and a remarkable transformation over the past four years while also setting the stage to accelerate the forward trajectory that is well underway. As my brothers — Robert, Jeffrey and Michael — and I step away, we are incredibly proud of what has been achieved and excited to pass the reins to the new ownership group. Merchants has the right team and management in place, the right partners in Bain Capital and ADIA and the determination and grit to forge an exciting future.”

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