Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Nyse  >  United Rentals       

UNITED RENTALS
Mes dernières consult.
Most popular
  Report  
SummaryChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets

United Rentals to Acquire Neff Rental in $1.3 Billion Deal

share with twitter share with LinkedIn share with facebook
share via e-mail
0
08/17/2017 | 10:10pm CET

United Rentals and Neff Corp. have entered into a definitive agreement for United Rentals to acquire Neff Rental for $25 per share in cash, for a total purchase price of approximately $1.3 billion. The deal was announced the day after H&E Equipment Services, which had previously agreed to acquire the Miami-based Neff for $21.07 per share, announced that it would not attempt to outbid the then-unannounced buyer.

Neff, No. 10 on the RER 100 listing of the largest equipment rental companies in North America, has 69 branches in 14 states, and is especially strong in the South and Southeast. Neff offers earthmoving, material handling, aerial and other equipment and is particularly strong in the earthmoving equipment rental arena.

Neff reported $360.1 million in rental revenue in 2016 and $397 million in total volume. Neff is expected to generate $207 million of adjusted EBITDA at a 49.5 percent margin on $419 million of total revenue in 2017. As of June 30, Neff had about $867 million of fleet based on original equipment cost.

The boards of directors of United Rentals and Neff unanimously approved the agreement. Private investment funds managed by Wayzata Investment Partners, which holds about 62.7 percent of the outstanding common shares of Neff, have written a consent to approve the transaction, thus providing stockholder approval. The acquisition is expected to close in the fourth quarter of 2017, subject to anti-trust clearance and customary conditions.

Neff terminated its previous merger agreement with H&E immediately prior to entering into the definitive merger agreement with United Rentals.

United Rentals, based in Stamford, Conn., is No. 1 on the RER 100 with $4.941 billion in 2016 rental revenue and $5.762 billion in 2016 total revenue.

United Rentals has paid H&E Equipment Services a termination fee of about $13.2 million on behalf of Neff.

United Rentals stated strong strategic rationale for the acquisition of Neff:

  • Neff’s branch footprint and complementary fleet mix will add efficiencies of scale in key market areas, particularly fast-growing southern geographies;
  • Neff’s established presence in the infrastructure sector works well with United’s Project XL vertical growth initiatives, and is expected to lead to attractive revenue synergies through cross-selling United Rentals broader fleet, including its specialty offerings;
  • The combined operations will benefit United Rentals by expanding its earthmoving fleet mix, along with Neff’s expertise in managing large earthmoving equipment;

United expects to realize significant cost synergies in operational efficiencies and corporate overhead, with a targeted adjusted EBITDA impact of about $35 million by the end of year two. The company expects to realize about $220 million in net present value of tax benefits included in the purchase price, which represents a multiple of 5.4 times adjusted EBITDA. Return on invested capital is expected to exceed the cost of capital within 18 months of closing.

The transaction is not conditioned on financing. United Rentals expects to use a combination of cash, existing capacity under its ABL facility, and newly issued debt to fund the deal.

“The acquisition of Neff is a significant opportunity for us to augment long-term returns for our investors, and build value for our customers and employees,” said United Rentals CEO Michael Kneeland. “We expect this transaction to be accretive to both our financial performance and customer-facing operations, with an important cross-selling component. The strategic rationale passed every litmus test with flying colors.

“With the successful integration of NES largely behind us, we’re prepared to move forward with another smooth transition in our landmark 20th year. We’re excited to realize the opportunities of this combination and leverage the many areas where we’re stronger together. Neff has a customer-focused team with seasoned field operators, a rigorous commitment to safety, and specialized expertise.”

“United Rentals is an industry leader in equipment rentals and as a result of this transaction, our employees and customers will benefit from the combined company’s expanded geographic footprint and diversified offering,” added Graham Hood, Neff CEO. “We look forward to working with the United Rentals management team as we bring these companies together and leverage the compatible strengths of both businesses.”

© 2017 Penton Media, source Trade Journals Open Web

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on UNITED RENTALS
02/14UNITED RENTALS : to Present at the Citi 2018 Industrials Conference
BU
01/30UNITED RENTALS : Free Research Report as United Rentals’ Revenue Surged 26%; Adj..
AC
01/29UNITED RENTALS : Infrastructure, Energy, Specialty Expected Strong in 2018, Knee..
AQ
01/24UNITED RENTALS : Reports Profit Boost Due to U.S. Tax Reform
DJ
01/24UNITED RENTALS INC /DE : Results of Operations and Financial Condition, Regulati..
AQ
01/24UNITED RENTALS : DE Management's Discussion and Analysis of Financial Condition ..
AQ
01/24UNITED RENTALS : Announces Fourth Quarter and Full Year 2017 Results Provides 20..
PU
01/24UNITED RENTALS : meets 4Q profit forecasts
AQ
01/24UNITED RENTALS : Announces Fourth Quarter and Full Year 2017 Results
BU
01/23UNITED RENTALS : Takeuchi Named United Rentals Supplier of the Year for 2017
AQ
More news
News from SeekingAlpha
01/23Notable earnings after Wednesday?s close 
01/12STOCK EXCHANGE : Will Sentiment Turn Bearish Soon? 
01/07SA INTERVIEW : Small-Cap Investing With William Garrison 
01/022017 Portfolio Performance Review - A Tale Of 2 Halves 
2017United Rentals Stock Is Positioned For Outperformance 
Financials ($)
Sales 2018 7 579 M
EBIT 2018 2 047 M
Net income 2018 1 189 M
Debt 2018 8 155 M
Yield 2018 -
P/E ratio 2018 12,13
P/E ratio 2019 10,67
EV / Sales 2018 2,95x
EV / Sales 2019 2,62x
Capitalization 14 210 M
Chart UNITED RENTALS
Duration : Period :
United Rentals Technical Analysis Chart | 4-Traders
Income Statement Evolution
Consensus
 
Mean consensus OUTPERFORM
Number of Analysts 18
Average target price 179 $
Spread / Average Target 6,7%
EPS Revisions
Managers
NameTitle
Michael J. Kneeland President, Chief Executive Officer & Director
Jenne K. Britell Non-Executive Chairman
Matthew John Flannery Chief Operating Officer & Executive Vice President
William B. Plummer Chief Financial Officer & Executive Vice President
Dale A. Asplund Chief Information Officer & SVP-Business Services
Sector and Competitors
1st jan.Capitalization (M$)
UNITED RENTALS6.84%14 127
WORLDPAY INC7.04%23 197
CINTAS CORPORATION5.47%17 502
UNITED RENTALS-2.83%14 127
ALLIANCE DATA SYSTEMS CORPORATION-1.35%13 815
BUREAU VERITAS-5.88%11 881