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Ares Management Serves as Lead Arranger, Junior Agent for $3B Financing Supporting Acquisition of Merchants Fleet

May 04, 2023, 07:40 AM
Filed Under: Transportation

Ares Management Corporation announced that funds managed by its U.S. Direct Lending and Alternative Credit strategies served as the lead arranger and junior agent for $3 billion in asset-backed and operating company financing for Merchants Fleet as part of the acquisition by Bain Capital, a wholly owned subsidiary of the Abu Dhabi Investment Authority (“ADIA”) and the Merchants executive team. BNP Paribas served as financing advisor and program agent for the financing.

Founded in 1962, Merchants is the fourth largest provider of fleet management services with over $2 billion in assets under management and over 175,000 managed commercial fleet units across North America. The Company has a differentiated business model focused on forward-thinking technology solutions, innovative fleet services and the proactive adoption of electric vehicles. The financing will allow Merchants' clients to continue to be on the cutting edge of commercial fleet through innovation and the development of new service offerings.

“As one of the fastest growing fleet management companies, Merchants is well-positioned to execute on its growth strategy and continued evolution of its fleet service capabilities,” said Scott Rosen, Partner in Ares’ Credit Group. “We look forward to working with the Company’s management team, as well as Bain Capital and ADIA, to capitalize on the significant opportunities ahead.”

“This transaction is another example of collaboration across the Ares platform, creatively combining our teams’ alternative credit investing experience in the asset-backed and leasing sectors with disciplined corporate underwriting to deliver scaled and flexible capital solutions to leading companies like Merchants Fleet despite volatile markets,” said Felix Zhang, Managing Director in Ares’ Alternative Credit strategy.

“We appreciate the support and flexibility that Ares provided,” said Brendan P. Keegan, CEO of Merchants Fleet. “We have been at the forefront of fleet services for 60 years, and this partnership will enable Merchants to further accelerate innovation, catalyze the EV revolution and fearlessly drive commercial fleet forward.”

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