In December 2003 we realised our investment in Loxam, a French leader in the short-term equipment rental for the construction industry.

The exit represented the third buyout of Loxam within a decade. Originally the subject of a management buyout in 1994, we invested in the company in 1999 to fund the second stage of its European expansion programme.

The attraction of the business was its scalability and the potential for consolidation in a highly fragmented European market. Beyond local competition, Loxam’s only major competitors were consolidators such as Hertz and Caterpillar, whose penetration of Loxam’s core markets was low. The market itself was also growing, with an increasing trend by construction companies to lease or rent plant equipment from external suppliers.

Post investment, we worked with the company to realise its strategy. Within 12 months we had identified and acquired three businesses in Europe and by 2002 Loxam had established itself as a leading European player. By the time of our exit in 2003, the business was generating sales of €360m and employed 2,000 people in 265 branches throughout France, the UK, Germany, Spain and Belgium.

The exit saw both Loxam’s management team and existing investors remain with the business, with management increasing its interest to 64%, and the participation of a new private equity investor – HarbourVest Partners.

The strategy going forward is to consolidate their leadership position in Continental Europe by expanding their local networks, while at the same time developing their portfolio of specialised services such as Loxam Power and Loxam Access.