Global private equity giant Warburg Pincus LLC has teamed up with Hong Kong-listed Chinese car rental firm Car Inc. to invest a total of US$250 million in Ucar Group, a mobile app-based chauffeured car service firm controlled by Car Inc.’s founder and CEO, according to a securities filing.
Car Inc. will purchase 2.5 million series A preferred shares in Ucar for US$125 million, which will turn into a 10% stake in Ucar on a diluted basis.
Warburg Pincus and Legend Capital Management Co., Ltd. will invest the remaining US$125 million.
Launched by Car Inc. as its mobile app-based chauffeured car unit in January, Ucar now covers 60 cities in China under the brand of its parent’s Chinese name as Shenzhou Zhuanche.
It is majority owned by entities controlled by the spouse and nephew of Charles Zhengyao Lu, Car Inc.’s chief executive officer and executive director, according to the filing.
"Our investment in Ucar will not only create significant business synergies, but will also bring us one step closer to executing our strategy and realizing our vision," says Lu.