Sunbelt Rentals to Acquire NationsRent
In one of the largest deals in rental industry history, Sunbelt Rentals announced yesterday it will acquire Fort Lauderdale, Fla.-based NationsRent in a $1.05 billion transaction.
The merger of Charlotte, N.C.-based Sunbelt Rentals, No. 4 on the RER 100, with No. 6 NationsRent, will make the combined company the third-largest rental company in North America. The two companies had a combined 2005 rental volume of $1.23 billion, higher than third-ranked Hertz Equipment Rental Corp.'s estimated $1.14 billion, although HERC posted an estimated $1.57 billion in total revenue compared with Sunbelt and NationsRent's combined $1.53 billion.
The combined companies will have 47 locations in 35 states, with about 7,000 employees.
Sunbelt is paying about $600 million in cash and bond redemptions for NationsRent in addition to taking on about $400 million of debt. The deal is expected to close around the end of August, subject to approval by Asthead shareholders and the consummation of financing arrangements, including a rights offering, along with customary governmental approvals. NationsRent CEO Jeff Putman said NationsRent's board of directors voted unanimously in favor of the merger.
"NationsRent is a high-quality company which, like Sunbelt, has an attractive and significant exposure to the growing non-residential construction market in the U.S.," said George Burnett, CEO of Ashtead plc, Sunbelt's United Kingdom-based parent company. "The merger of NationsRent with Sunbelt uniquely creates a chain of 477 outlets with minimal overlap and accelerates our 'clustering' strategy that has delivered consistent profitable growth over the past few years. NationsRent and Sunbelt have similar rental fleets both in age and in mix and through the combination of these businesses we believe we will enjoy benefits of scale in both customer service and buying power."
The merger extends the reach of the combined companies to eight additional states, with NationsRent branches in Colorado, Louisiana and some New England states being added to the Sunbelt network.
Source: Rental Equipment Register
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