Addison Lee founders get £300m fare as they sell cab firm
RAC owners buy it and plan expansion outside London to M25 and other cities
Mark Leftly is political correspondent at The Independent on Sunday and associate business editor across the Independent titles. He writes a weekly column, Parliamentary Business, published on a Wednesday, that covers politics and the City. He is a multi-award winning reporter and was named Press Gazette's business magazine journalist of the year prior to joining The Independent on Sunday.
Saturday 20 April 2013
The US private-equity giant Carlyle is planning to expand the cabbie company Addison Lee into cities beyond central London after buying the firm in a deal worth close to £300m yesterday.
Founded with one car in Battersea in 1975, father-and-son team John and Liam Griffin sold the business yesterday to the Carlyle Group, which also owns the RAC and the health-food chain Holland & Barrett.
The Griffins and the family of Lenny Foster, who started the minicab empire with them, will share those spoils while retaining a small stake in the business.
It has been quite a rise to fortune for John Griffin as, in the Seventies, he was forced to ditch his apprenticeship as an accountant and turn to mini-cabbing in order to make ends meet and rescue his father’s business.
Today, Addison Lee uses a cutting-edge IT system to manage bookings for its 4,500 cars after emerging as the major competitor to London’s black cabs.
Under the terms of the deal, the elder Mr Griffin, John, will remain as chairman and his son as chief executive. Drivers who work for the company do not own shares and so will not get a windfall from the deal.
Liam Griffin said: “We’re very much concentrated in central London, but now we can look at going further afield within the M25, like the suburbs. We’ll look primarily at that area first.”
Carlyle Europe Partners’ managing director, Andrew Burgess, said he was keen to roll out Addison Lee to other cities in the UK which could benefit from the firm’s use of apps and technology that creates such an “efficient dispatch” system.
Internationally, Addison Lee already has burgeoning joint ventures in Paris and New York and the younger Mr Griffin said that Carlyle’s international experience – it has 33 offices around the world – would help Addison Lee make major breakthroughs overseas.
The cabbie is also looking to widen the range of accounts with blue-chip corporates, which should mean it will end up hiring more than the 4,000 cab drivers that Addison Lee employs today.
John Griffin courted controversy last year when he spoke out against London cyclists. He claimed they were to blame for their own injuries on the capital’s busy roads, arguing that they “leap on to a vehicle which offers them no protection except a padded plastic hat”.
He added that people were safer taking taxis as they would be “sitting inside a protected space with impact bars and air bags and paying extortionate amounts of taxes on our vehicle purchase, parking, servicing, insurance and road tax”.
He also argued for compulsory training and insurance for London’s cyclists, who were sufficiently angered to accuse him of “victim blaming”.
The capital for the deal will come from Carlyle Europe Partners III, a €5.4bn (£4.6bn) fund that makes investments in mid-cap and larger companies. Carlyle has $170bn (£111bn) of assets under management across its many funds.
It was advised on the transaction by Deloitte, OC&C and Latham & Watkins. Addison Lee was advised by Catalyst Corporate Finance.
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