Construction Equipment Guide
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Mon September 10, 2018 - National Edition
United Rentals, Inc. and BlueLine Rental (“BlueLine”) announced that they have entered into a definitive agreement under which United Rentals will acquire BlueLine from Platinum Equity for approximately $2.1 billion in cash. The board of directors of United Rentals unanimously approved the agreement. The transaction is expected to close in the fourth quarter of 2018, subject to Hart-Scott-Rodino clearance and customary conditions.
BlueLine is one of the ten largest equipment rental companies in North America, serving over 50,000 customers in the construction and industrial sectors with a focus on mid-sized and local accounts. The company has 114 locations and over 1,700 employees based in 25 U.S. states, Canada and Puerto Rico. For the trailing 12 months ended August 31, 2018, BlueLine generated an estimated $313 million of adjusted EBITDA at a 39.8 percent margin on $786 million of total revenue.
Michael Kneeland, chief executive officer of United Rentals, said, “The acquisition of BlueLine meets all of our criteria for long-term, profitable growth at attractive returns. We're executing our strategy of 'growing the core' in a strong demand environment to drive superior value for our customers and shareholders. Our company will be going to market with more talent, capacity and customer diversification than ever before.
“There are some distinct advantages to the BlueLine integration, such as our common technology systems and strong safety cultures. BlueLine has a fleet mix that complements our own, and a well-diversified base of mid-sized and local customers, many of whom can use our specialty solutions. We expect to complete the acquisition in the fourth quarter, setting the stage for an exciting 2019. I look forward to welcoming our new colleagues very soon.”
Louis Samson, partner at Platinum Equity, said, “BlueLine has evolved into a strong industry leader and is in perfect position to take the next step as part of United Rentals. Following the initial carve out from Volvo four years ago, we deployed the full range of Platinum's M&A&O tool kit to completely transform the business. Substantial investments in systems, add-on acquisitions and other growth initiatives drove improvements in top-line and earnings performance. It is a natural fit with United Rentals, and both companies will benefit from the combination.”
United Rentals plans to pause its current $1.25 billion share repurchase program upon closing the BlueLine acquisition to integrate the operations and assess other potential uses of capital. This is consistent with the company's approach during the integrations of NES Rentals and Neff Rental in 2017.
Morgan Stanley & Co. LLC and Centerview Partners acted as financial advisors to United Rentals, and Sullivan & Cromwell LLP acted as legal advisor. Barclays and Catalyst Strategic Advisors acted as financial advisors to Platinum Equity, and Latham & Watkins LLP acted as legal advisor.
EBITDA is a non-GAAP financial measure as defined under the rules of the Securities and Exchange Commission. United Rentals believes that this non-GAAP financial measure provides useful information about the proposed transaction; however, it should not be considered as an alternative to GAAP net income.
United Rentals, Inc. is the largest equipment rental company in the world. As of July 31, 2018, the company had an integrated network of 1,054 rental locations in North America and 11 in Europe, with approximately 16,400 employees serving construction and industrial customers, utilities, municipalities, homeowners and others. The company offers approximately 4,200 classes of equipment for rent with a total original cost of $12.4 billion. United Rentals is a member of the Standard & Poor's 500 Index, the Barron's 400 Index and the Russell 3000 Index and is headquartered in Stamford, Conn.
For more information, visit unitedrentals.com.
BlueLine Rental serves customers in major construction and industrial sectors in North America with a network of 114 locations, primarily in the United States, and approximately 1,700 employees. The company has over 46,000 units of fleet in aerial, material handling, earthmoving, compaction and other general equipment categories, with an original equipment cost of approximately $1.5 billion. BlueLine Rental is headquartered in The Woodlands, Texas.
For more information, visit bluelinerental.com.