Ares fund acquires majority stake in Epika Fleet Services

NASHVILLE, Tenn. - Ares Management Corporation’s private equity fund, a $44.5 billion market cap investment firm with annual revenues of $3.9 billion, has acquired a majority stake in Epika Fleet Services, Inc., a provider of mobile maintenance and repair services for commercial trucking fleets. This strategic move, announced today, is set to bolster Epika’s service offerings and expand its market presence. According to InvestingPro data, Ares has demonstrated strong financial performance with nearly 7% revenue growth in the last twelve months.

Epika, established in 2016, has become a prominent name in the commercial fleet repair and maintenance sector, operating across nearly 40 states and serving more than 2,000 fleet customers. The company’s growth trajectory has been marked by a robust mobile service model, employing over 550 skilled technicians to perform on-the-road inspections, maintenance, and repairs. Additionally, Epika maintains around 20 in-shop centers for complex and emergency services. This acquisition aligns with Ares’s strong dividend profile, having maintained dividend payments for 12 consecutive years with a 45% dividend growth in the last year, as reported by InvestingPro.

Joe Dougherty, CEO of Epika, highlighted the company’s commitment to quality and customer service as foundational to its success. The partnership with Ares is expected to amplify Epika’s growth, enhancing its national reach and customer loyalty.

Ares Private Equity representatives, Natasha Li and Mike Nawrot, emphasized the investment aligns with the increasing demand for mobile service solutions in the fleet sector. Epika’s high-quality service delivery positions it to capitalize on this demand, promising reduced operational complexity and improved fleet productivity for customers.

While the financial terms of the transaction remain undisclosed, William Blair acted as Epika’s exclusive financial advisor, with Reed Smith LLP and Maslon LLP providing legal counsel. Ares received financial advice from Piper Sandler and legal guidance from Sullivan & Cromwell LLP.

The deal underscores the potential for growth and innovation in mobile fleet services, a sector that is experiencing a significant shift towards mobile-first solutions. Epika’s expanded platform, backed by Ares’ investment, is poised to meet the evolving needs of fleet operators across the United States.

This news article is based on a press release statement from Epika Fleet Services, Inc. Ares Management currently trades at a P/E ratio of 68, reflecting high growth expectations. InvestingPro analysis shows the company maintains a "GOOD" overall financial health score, with particularly strong metrics in profitability and growth. Subscribers can access over 10 additional ProTips and comprehensive financial metrics for Ares Management through the InvestingPro platform.

In other recent news, Ares Management reported a decline in fourth-quarter earnings per share (EPS), posting $1.23, which fell short of the analyst consensus estimate of $1.32. Despite this miss, the company achieved approximately $3.8 billion in new investment commitments, with portfolio investments at fair value rising to $26.72 billion. Ares Management’s liquidity remains strong, with $635 million in cash and cash equivalents. Additionally, ID.me secured a $275 million credit facility from Ares Management funds, with Ares also planning a significant equity investment to support ID.me’s growth.

In analyst developments, Oppenheimer upgraded Ares Management stock from Perform to Outperform, citing confidence in its business model amid market downturns. The firm set a new price target of $159.00, reflecting a positive outlook on Ares Management’s resilience. Similarly, Citizens JMP upgraded the stock from Market Perform to Market Outperform, setting a price target of $165.00, highlighting Ares Management’s substantial available capital of $133 billion. This capital, once deployed, is expected to generate significant management fees, contributing to the company’s earnings and shareholder value.

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