In an exciting move, Xerox Credit Corp. recently signed a letter of intent for the acquisition of LMV Leasing, Inc. Xerox Credit will be acquiring all the stock of LMV from the McKean Corp., which is owned by the three McKean brothers. The successfully managed Pittsburgh-based company has approximately 9,000 cars and 4,000 light trucks under lease, many with large corporations such as U.S. Steel, Heinz, and Alcoa. LMV's corporate officers include John McKean, Andy Strauss, and Edgar Kimmell. President John McKean says that his company will remain at its present location and keep its present management.
Bill Montgomery, president of Xerox Credit Corp., which is based in Greenwich, CT, recently explained much of the reasoning and the implications of the acquisition to AF: "Xerox Credit made a decision to expand in several leasing areas. We realized we lacked the expertise to develop a vehicle leasing operation in house; therefore, we looked outside for a successful operation that we could acquire." Xerox Credit Corp. has also recently acquired Circle Leasing in Indianapolis, an equipment lessor, and an insurance company.
When questioned as to what changes we might expect in LMV in the wake of the Xerox Credit acquisition, Montgomery states, "The only change we would make would be anything outside of fleet leasing; that would be the contribution we at Xerox Credit could make." One obvious tie-in may be the strength that the parent company can offer in the area of computerization. Montgomery comments, however: "If the management of LMV sees this as a necessity, we will do it and do it immediately. But John McKeans knows best. We didn't buy the company in order to go in and start dictating change."
As to what Xerox Credit will be able to offer LMV, Montgomery states, "Although LMV has good borrowing relationships, one thing we think we can bring is lower borrowing costs." LMV's McKean comments: "It gives us the financial backing so we can expand our services to our customers and expand into the marketplace.
One question that immediately comes to mind is whether Xerox Credit's acquisition of a major vehicle leasing company will have an effect upon the fleet operation at Xerox Corp., Xerox Credit's parent. The Xerox fleet is one of the largest in the nation, with a total of 12,000 cars and light trucks currently under lease from Gelco, Leaseway, and U.S. Fleet Leasing (who recently assumed the leases from Hertz). Montgomery comments, "There is no assumption that the Xerox fleet will be leased from LMV. There is the possibility of that, but our parent has a good relationship with our lessors. Of course, there are some obvious advantages we can bring to our parent. But there is no sweetheart deal here."
Ron Pink, Xerox fleet manager, is enthusiastic about the future: "The acquisition will create many exciting possibilities. They now have the potential to support our existing programs and several ideas I have. But as for any immediate changes, I don't know. I'll have to look inside LMV. We have always had an excellent business relation with our current suppliers. But it all depends on the capabilities of LMV."
