United Rentals to buy Ahern Rentals
United Rentals Inc. announced on November 21, 2022 it would acquire the assets of Ahern Rentals Inc. for about $2 billion in cash as the equipment rental firm looks to expand its U.S. presence.
The deal will help United better capitalize on rising demand from manufacturers and construction companies as they ramp up output amid a post-pandemic rebound in industrial activity.
This is the latest in a string of acquisitions by the Stamford, Connecticut-based company over the past few years.
"URI (United Rentals Inc) has a track record of meaningfully improving margins in acquired general rental businesses," says Jerry Revich, Goldman Sachs analyst.
United, which said it can get more productivity out of Ahern's fleet, expects the deal to generate about $40 million of annualized cost synergies within the first 12 to 18 months of closing.
The deal is estimated to close before the end of this year. It expects to fund the deal with a mix of newly issued debt and existing capacity under its Asset-Based Loan (ABL) facility.
Ahern was founded in 1953 and is a family-owned equipment rental firm with about 2,100 employees. It operates across 106 locations in 30 U.S. states, with a rental fleet that consists of aerial lifts.
Source: Reuters
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