TIP hitches-up Cetern
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• TIP has taken over Cetem/ ITR, the leading trailer rental company in the Netherlands, for 210.5 million. The deal, which marks a further rationalisation of the European trailer rental sector in the wake of the recent 271.5 million acquisition of Rentco by Tiphook, will beef up TIP's 10,000-strong fleet by 1,250.
TIP has big ambitions, and chairman Jim Cleary says the time is ripe for expansion. "'i'he big UK, French and German markets are far from saturated and we expect to announce more acquisitions within the next six months."
If all goes according to plan, TIP could have a fleet of more than 16,000 by late 1989, giving it a rough parity with the combined Tiphook/Rentco fleet, the biggest in Europe.
Cleary denies the takeover is a response to the Tiphook merger or the rapid growth of BRS. "We are acting almost independently of our competitors. There's room for everybody in such a buoyant market," he asserts.
TIP claims the takeover will give it an 80% share of the Benelux market and bolster the company's strategy for 1992. "UK-based firms will have a hard time catching up with us before 1992," Cleary says. "Europe to us is not somewhere we are going to, it's somewhere we already are."
The Ceteni/ITR fleet comprises container chassis and tilt trailers working for international hauliers. TIP has concentrated on building up a premium three-axle/reefer fleet for big own-account operators: Cleary says the deal will avert the danger of overspecialisation. "This acquisition enables us to retain a market we had stepped away from."
Cetem/ITR is forecasting pre-tax profits of 2211,000 for the six months to 30 June and TIP says its book value of net assets has been grossly undervalued at 21.2 million. The acquisition is being partly financed by the issue of 6.5 million new shares, representing nearly 10% of TIP's existing capital. These are being placed with institutional investors to raise 29.9 million.
D TIP has just ended a record financial year with a 26% pre-tax profit jump to 29.1 million (27.2 million in 1987), a joint listing on the London and Amsterdam stock exchanges in February and a rise in earnings per share from 12.5 pence to 23.07 pence.
Last week, the chairman announced a nett dividend of 2.8 pence per share and predicted a strong future for the company. TIP has invested 220 million in new trailers this year and plans to continue using high-quality, new equipment with an average age of about five years.
New operations in France, West Germany, Spain and Italy are planned and the group will be looking to increase its 234.8 million 1988 income (232.3 million in 1987) considerably during 1989.