Canadian Equipment Rental Corp. has sold its equipment rental company 4-Way Equipment Rentals, in Edmonton, Alberta, Canada to Mississauga, Ont.-based Cooper Equipment Rentals for CDN $8.5 million in cash.
“This transaction is the next step in strengthening our balance sheet and narrowing the focus of the company to the upstream and midstream energy services industry,” said Ken Olson, CEO OF Calgary, Alberta, Canada-based CERC. “The cash proceeds from the sale will be used to reduce bank indebtedness and provide us with greater refinancing flexibility.”
The sale price represents about 73 percent of current tangible asset book value and approximately 5.2 times 12-month trailing Sept. 30, 2016 EBITDA.
The transaction is expected to close in about a week, subject to approval by the TSX Venture Exchange and customary closing conditions.
CERC began with 4-Way but has increasingly devoted itself to the energy services industry in the past few years, acquiring a number of companies in that sector.
Cooper Equipment Rentals has grown with several major rental company acquisitions in recent years in Ontario, most notably its Oct. 2015 purchase of SMS Rents, one of the largest equipment rental companies in Ontario and Quebec. Cooper has more than 20 branches in Ontario and Quebec, and earlier this year opened a trench safety rental division. The acquisition is Cooper’s initial foray into Alberta.
Cooper Equipment Rentals is No. 42 on the RER 100.
