Big news in the rental world within the last week: United
Rentals Inc. and RSC Holdings announced that they have entered into a
definitive merger agreement under which UnitedRentals will acquire RSC in a cash-and-stock transaction
valued at $18.00 per share, or a total enterprise value of $4.2 billion,
including $2.3 billion of net debt. Both companies’ boards have approved the
proposed transaction and recommended that their respective stockholders approve
the proposed transaction.
The proposed transaction will create a leading North
American equipment rental company with a more attractive business mix, greater
scale and enhanced growth prospects. The combination is also expected to
accelerate United Rentals’ growth with industrial customers as well as provide
a lower cost base and a less volatile revenue profile to better position the
company through all phases of the business cycle. The new United Rentals is
well-positioned to benefit from increased rental penetration, the continued strength
of the industrial sector, serving customers across a variety of industries and
a recovery in construction activity. United Rentals and RSC have already begun
working on a plan to facilitate a smooth integration of the businesses and
realization of over $200 million of potential cost savings.
“This transaction marks a transformative moment in our
company’s history,” Michael Kneeland, president and CEO of United Rentals.
“Combining the experience and resources of two top performing equipment rental
companies creates an exceptional company. The new United Rentals will build
upon the best practices and management teams from both companies to deliver
superior customer benefits and enhanced value for our stockholders. With the
best talent in the industry, we have a tremendous opportunity to become the
supplier of choice for customers throughout North America.”
Erik Olsson, RSC’s CEO and president, said this partnership
will allow both companies far more opportunities together vs. individual
endeavors.
“… With United Rentals, we can accomplish far more than
either company could have achieved on its own, including significant
synergies,” Olsson said. “As a result, the transaction delivers significant
value to our shareholders. Our similar customer-centric cultures and commitment
to operational excellence will provide even greater value to our customers and
facilitate a smooth integration. I look forward to helping to lead the
integration process during a transition period.”