NEW YORK, SEPT. 28 -- Avis Inc., the No. 2 car rental company that has changed hands nine times since 1954, was sold again today -- putting its employes in the driver's seat this time.
Avis announced that Wesray Capital Corp. had sold all of the car renter's outstanding stock for $1.75 billion to an employe stock ownership plan representing all 11,000 Avis personnel.
The sale of the Garden City, N.Y., company to its workers was believed to be the largest sale of a business to an ESOP in U.S. history.
Wesray is a privately held company specializing in leveraged buyouts, deals in which a buyer borrows the money to finance an acquisition and uses the acquired company's assets or earnings to repay the debt. Wesray investors, including Avis management, acquired Avis in July 1986 from Beatrice Cos. for $265 million in cash. Wesray also assumed $1.34 billion in Avis debt.
Avis, which has billed itself as the "We Try Harder" car renter competing against industry leader Hertz Corp., said the employes also would take over the company's debt of around $1 billion under the ESOP.
Avis also announced that J. Patrick Barrett, chairman and chief executive officer, had resigned and that Avis' president and chief operating officer, Joseph V. Vittoria, would replace him. Vittoria began his career at Avis but spent four years at Hertz before rejoining Avis in 1982.
The sale to employes was the "ideal formula" for bringing stability to Avis after its revolving-door series of owners, Vittoria said in a telephone interview.
In addition to Wesray and Beatrice, Avis' owners have included conglomerates ITT Corp., Norton Simon Inc. and Esmark Inc., as well as investment firms Lazard Freres & Co. and Kohlberg, Kravis, Roberts & Co.
With the sale to its employes, Avis seems to have gone beyond its rivals -- most of which also were sold in leveraged buyouts by the big corporations that owned them after the car rental business hit a rough stretch of price-cutting and rising insurance costs in this decade.
Budget Rent-A-Car, for instance, was sold to investors in a leveraged buyout for $205 million in late 1986, and National Car Rental System was acquired in a similar deal last December for $459 million.
Hertz is the only major car rental firm that still belongs to a larger company, Chicago-based travel conglomerate Allegis Corp., which bought it for $587.5 million in 1985.
But Allegis, in a radical policy change, has put all its components other than United Airlines on the market. It recently sold its Hilton International Co. hotel unit to Ladbroke Group PLC of Britain, and is seeking a buyer for its Westin Hotel subsidiary.
Speculation is strong in financial quarters that Hertz could announce a leveraged buyout of its own later this week, although some observers believe an airline company could be the buyer