BlueLine Rental, United Rentals, Inc. enter into agreement.
STAMFORD, Conn: BlueLine Rental and United Rentals, Inc. 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.
It 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% margin on $786 million of total revenue.
The purchase price of approximately $2.1 billion represents a multiple of 6.7x adjusted EBITDA for the trailing 12 months ended August 31, 2018; and a multiple of 5.4x adjusted EBITDA including cost synergies and the net present value of tax attributes estimated at $169 million. The acquisition is expected to be immediately accretive to United Rentals' adjusted earnings per share and free cash flow generation and result in a net leverage ratio of below 3.0x by year-end 2018 on an as-reported basis, with a strong path for deleveraging thereafter. On a pro forma basis, the company expects its net leverage to be below 2.8x by year-end.
Return on invested capital is expected to exceed the cost of capital within three years of closing, with an attractive IRR and NPV. The combination is expected to generate approximately $45 million of cost synergies in the areas of corporate overhead, operations and third-party re-rent, and improve returns on BlueLine used equipment sales. Additionally, United Rentals expects to realize approximately $15 million of fleet and other procurement savings based on the combined spending.
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|Publication:||Daily the Pak Banker (Lahore, Pakistan)|
|Date:||Sep 15, 2018|
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