United Rentals To Buy BakerCorp.
Purchase price about $715 million; CFO William Plummer to retire.
United Rentals Inc. (URI) reports it agreed to buy BakerCorp International Holdings, Inc. for about $715 million in cash.
The boards of directors of United Rentals and BakerCorp have unanimously approved the agreement. The transaction is expected to close in the third quarter of 2018, as reported by RTTNews.
BakerCorp is a provider of tank, pump, filtration and trench-shoring rental solutions for a broad range of industrial and construction applications. The company has approximately 950 employees serving more than 4,800 customers in North America and Europe.
BakerCorp's operations are primarily concentrated in the United States and Canada, where it has 46 locations, with another 11 locations in France, Germany, the UK and the Netherlands. For the trailing 12 months ended May 31, 2018, BakerCorp generated $79 million of adjusted EBITDA at a 26.9 percent margin on $295 million of total revenue.
The combined company will serve a larger strategic account base with a broader fleet range, including approximately 24,000 units to be acquired at closing.
The company plans to update its 2018 financial outlook to reflect the combined operations after the transaction is complete.
The acquisition is expected to be accretive to adjusted earnings per share with an attractive internal rate of return and run-rate ROIC exceeding cost of capital within 36 months after closing.
The company expects its net leverage ratio to be approximately 2.5x at year-end 2018 and remains committed to executing its recently announced $1.25 billion share repurchase authorization.
The transaction is not conditioned on financing. United Rentals expects to use a combination of cash and existing capacity under its ABL facility to fund the transaction and related expenses.
Separately, United Rentals said that William Plummer will retire as executive vice president and chief financial officer on October 12, 2018. Plummer is the company's longest-serving chief financial officer, having joined United Rentals in 2008. He will remain with United Rentals until January 31, 2019 in an advisory capacity.
The United Rentals board of directors has appointed Jessica Graziano as chief financial officer, effective October 12. Graziano joined United Rentals in December 2014 as controller and principal accounting officer and was promoted to her current role in March 2017. In this role, she works closely with the senior leadership team and oversees the company's accounting, financial planning and analysis and insurance departments.
Graziano has more than two decades of financial management experience, previously serving as senior vice president, principal financial officer, chief accounting officer and corporate controller for Revlon Inc. Earlier, she held senior financial positions with UST Inc., Sturm, Ruger & Company Inc. and KPMG LLP.
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