Essex Rental Corp. last week successfully completed its acquisition of the assets and business of privately held Coast Crane Co. Essex will operate the Coast business through a new, wholly owned subsidiary called Coast Crane Co., which will be operated independently of Essex’s existing operating business, Essex Crane Rental Corp. Coast’s management team will continue to be led by Dan Goodale, the CEO of Coast’s predecessor.
Essex paid approximately $80 million for Coast’s assets, approximately $48 million of which is being financed by a new $75 million, four-year, interest-only, non-amortizing senior credit facility. Essex also assumed approximately $12 million of predecessor Coast indebtedness. The acquisition price reflects a significant discount to the replacement value of Coast’s assets. For the 12 months ended Sept. 30, Coast generated revenues of approximately $85 million based on Coast’s unaudited financial information for the period. Essex expects the operations of Coast to be meaningfully accretive to Essex’s 2011 free cash flow per share and as of the closing is accretive to net asset value per share.
“The acquisition of Coast broadens our product offering to include assets that are contiguous and complementary to our existing fleet of crawler cranes, expands our geographic reach into Western North America, Alaska, Hawaii, Guam and the South Pacific, and adds a proven, respected group of industry professionals to our management and operating teams,” said Ron Schad, president and CEO of Essex. “In combination with what we believe are improving conditions in our end markets, we expect that these factors will allow us to leverage the meaningful customer and project overlap that the two companies share, and drive higher asset utilization. We are very excited about the acquisition of Coast and the opportunities that lie ahead.”
“We are confident that Coast is well-positioned to maintain, and, over time, significantly expand, its industry leadership position,” Goodale added. “We remain unwavering in our commitment to our customers, employees, and other stakeholders, and look forward to working with Essex to build upon our 40-year history of specialization, innovation and success.”
Based in the Chicago suburb of Buffalo Grove, Ill., Essex Rental Corp. is No. 40 on the RER 100. Coast Crane, No. 34, is based in Seattle.