U.K. Firm to Buy RentX for $99 Million DENVER - Meyer International PLC, parent of the United Kingdom's largest building material supplier and one of its largest rental operations, has agreed to buy RentX Industries for $98.7 million in cash and assumed debt.
The deal for Denver-based RentX, which has 72 outlets and is ranked No. 16 on the RER 100 with 1998 rental volume of about $46.5 million, is expected to close as soon as this month.
RentX president Skip Evans, whose Zodiac Rentals was RentX's original platform company for expansion, said he would continue to run the company for Meyer.
"I'm staying, and I don't see RentX changing that much," Evans said. "The only thing that is changing is the shareholders. We will keep the RentX name and will be run as a wholly owned subsidiary."
Meyer, which operates about 150 Jewson Hire Point and Torex Hire equipment rental outlets in the U.K., owns Jewson, the U.K.'s largest building materials supplier.
"This will give us a platform from which to expand our presence in the United States," said Meyer chairman Tony Palmer. "The U.K. has seen more homeowners using our [rental] customers, the small [contractor], to carry out house maintenance. A similar trend in the United States encourages us to seek further acquisitions in both these key markets."
RentX, formed in 1996, was one of the first companies to attempt an aggressive consolidation of the rental industry, focusing on the homeowner and small contractor niche. The company struggled financially after its failed IPO attempt in 1997 and had been exploring a sale of all or part of its operation for more than a year, according to sources.
"Now, we're going to be part of a large company, and they are going to let us run it," Evans said. "It really is the best of both worlds. Because we will have virtually no debt, we will be one of the best financially positioned rental companies in the United States."
United Acquires Mi-Jack, Signs Agreement for Arayco GREENWICH, Conn.- United Rentals has acquired the rental division of aerial specialist Mi-Jack Products and signed a definitive agreement to acquire Arayco, the rental arm of Raytheon Co.
Mi-Jack's rental division has revenue of about $54 million from 10 locations in Illinois, Indiana, Michigan and Texas. The deal includes its Walter Payton and Access Equipment affiliates.
Arayco, No. 38 on the RER 100 with an estimated $26 million in rental revenue, operates in Denver; Houston; Toledo, Ohio; Greenville, S.C.; and East Sumner, Wash., where it is based. As part of the deal, which is subject to Hart-Scott-Rodino review, United will be the preferred provider of rental services to Raytheon construction projects in North America for at least three years.
United also continued to acquire market share in the Pacific Northwest with the acquisition of Pilchuck Rentals & Sales, which has three Seattle-area locations and about $8 million in total annual volume, according to sources. Pilchuck founder Lance Brown, who started the company in 1979, is expected to stay on with United in a management capacity, while partner Richard Matson is retiring.
In March, Greenwich, Conn.-based United acquired 15-location Forte Rentals (No. 43 on the RER 100), based in Tukwila, Wash.
In the past two months, United has purchased three-location Ibex Contractors Equipment in Kentucky and Ohio; three-location Campbell North in Manitoba and Alberta; two-location Valjar in Virginia; and one-location outfits Tool Box Rental in Utah, Adon Equipment in Ohio and Jax Construction Equipment in Florida. Combined, these six companies generate about $26 million from 11 locations.
In other news, United is considering a private equity deal similar to the $300 million arrangement it completed with Apollo Capital in January, sources say.
Neff Buys 5 RentX Outlets MIAMI - Neff Rental has purchased five Virginia outlets from RentX Industries as well as rental centers in Colorado and Washington from independent sellers. Terms were not disclosed.
Denver-based RentX - which has announced it will be bought by Meyer International - acquired the five branches in February 1998 as part of its buyout of Alliance Equipment Corp.
The Fredericksburg, Glen Allen, Newport News, Norfolk and Richmond, Va., locations are the first in the state for Miami-based Neff, No. 6 on the RER 100.
"We have a good presence in the Carolinas, and this acquisition nicely supplements our presence in the region," Neff president Kevin Fitzgerald told RER. "Meanwhile, our plan to explore strategic options for Neff is continuing and going very well. We expect that in 30 days, give or take a few days, we will be in a position to make an announcement on where we stand."
Neff also bought two-location Iliff Rent Center - based in Denver with a branch in Littleton, Colo. - and two-location Road Machinery, based in Portland, Ore., and Spokane, Wash.
ICM, Head & Engquist to Merge SALT LAKE CITY - A private equity investment firm that recently bought ICM Equipment Co. plans to acquire Head & Engquist Equipment and merge the two companies, forming a rental equipment and distribution business with markets spanning from the Gulf Coast to the Pacific Northwest.
Bruckman, Rosser, Sherrill & Co. acquired ICM, No. 12 on the RER 100, from Ripplewood Holdings to complete the first step of the complicated four-party transaction.
BRS is expected to acquire Baton Rouge, La.-based Head & Engquist, which operates 17 locations in Arkansas, Louisiana, Tennessee and Texas under the names Head & Engquist, H & E Rental Co. and South Texas Equipment Co.
Once the Head & Engquist deal is complete, sources say the newly merged companies will pursue acquisitions of other equipment companies.
ICM president and COO Gary Bagley said that both ICM, based here, and Head & Engquist will retain their current management and that each would continue to do business under its own name.
The deal for 17-location ICM, the terms of which were not disclosed, ends a long bidding process in which New York-based investment bank Ripplewood looked wide and far to divest its interest in ICM. Ripplewood, which acquired ICM in 1997, shopped the company to several top rental companies, including United Rentals and National Equipment Services, according to sources.
"Basically what we're doing is replacing Ripplewood with BRS," Bagley said. "We are going to maintain our profile as a integrated distributor-rental house, which makes us feel good about this deal."
BRS, a New York-based leveraged buyout and recapitalization specialist, has recently acquired MEDIQ, California Pizza Kitchen and CORT Business Services, a rent-to-rent furniture company.
GE Launches Rental Venture SCHENECTADY, N.Y.- GE Power Systems has created a new business unit called GE Energy Rentals to rent generators and temperature-control systems, and to provide related maintenance, installation and logistical services.
GE Energy Rentals opened operations last month in Atlanta, Philadelphia and North Bergen, N.J. By next month, the division will be in Chicago, Los Angeles, Houston, Miami and Baton Rouge, La.
GE Power's existing 70-location international network of service centers will add rental depots and give the new business "a significant edge in having equipment available where and when it is needed," said GE Energy Rentals president Marty Moore. "No other supplier of GE's size and scale owns its rental distribution channel."
The new unit hopes to capitalize on inroads in the construction arena made by GE Capital, which rents portable office space. A rental sales force will target the small to medium-sized commercial and industrial customer on the local level, Moore said.
Moore, who has been with GE for 20 years, most recently in the M&A area, also said "there is a fair chance" that GE Energy Rentals would deepen its market penetration through acquisitions.
GE Energy Rentals will compete against leading power systems rental providers Aggreko and Cat as well as independent distributors. It will initially offer generators ranging from 5 kilowatts to 1.5 megawatts, air conditioners up to 50 tons, and water-cooled chillers up to 1,000 tons. Accessories will include transformers and other support systems.
GE Power Systems, based here, is a $10 billion division of GE Electric.
RSC Rejects United, but Offers to Meet SCOTTSDALE, Ariz. - Rental Service Corp.'s board of directors last month conditionally agreed to allow hostile suitor United Rentals to review its books and meet with its top management.
A Rental Service Corp. spokesman said that the company authorized its financial and legal advisers to provide confidential financial information and access to RSC's senior management to potential buyers - including United Rentals - provided they enter into appropriate confidentiality and standstill agreements.
However, sources said it was unlikely that United would agree to the standstill clause, which would force United to at least delay and perhaps completely drop its hostile tender offer.
Meanwhile, RSC's board of directors reaffirmed its previous rejection of a $22.75 per share tender offer from United Rentals. The unsolicited offer in April set in motion suits and countersuits that culminated in the termination of RSC's planned merger with NationsRent, Fort Lauderdale, Fla. Last month, a federal court dismissed RSC's claims that United Rentals violated securities law in its hostile bid to acquire the industry's No. 3 player.
RSC, based here, urged its shareholders to reject the hostile bid, which Greenwich, Conn.-based United has kept unchanged on the table, as well as United's solicitation to replace RSC's directors.
In other RSC news, stockholders of record on July 7 will be able to vote at the company's annual meeting Aug. 27.
Anthony to Buy Carlisle Construction WILDER, Ky. - Anthony Crane Rental, whose Anthony Equipment division ranked No. 29 on the RER 100, has announced plans to acquire Carlisle Construction Co.
Terms were not disclosed, but the deal is expected to be financed by about $160 million in secured debt and some seller financing, according to officials at Anthony.
Carlisle, based here, operates five Carlisle Crane & Equipment locations in Dayton, Ohio; Indianapolis; Louisville and Wilder, Ky.; and Orlando, Fla. Carlisle, which features one of the largest crane inventories in the United States, has a rental fleet featuring excavators and other earthmoving equipment.
The deal was expected to close in late June, according to Monroeville, Pa.-based Anthony, which was purchased by Boston investment group Bain Capital in July 1998.
In other news, longtime Anthony Crane Rental top officer Sam Anthony resigned in May.
Chicago-Based Union Pickets Against RSC CHICAGO - The International Union of Operating Engineers has called a strike against Rental Service Corp., targeting more than a dozen facilities in Illinois, Indiana and Iowa. Chicago-based Local 150 is targeting 15 RSC branches and has filed unfair labor relations practices against the Scottsdale, Ariz.-based firm with the National Labor Relations Board, RER has learned.
The union claims to have shut down RSC's activities in those areas, but RSC's senior vice president of human resources, Dave Harrington, acknowledged only that "informational picketing rather than a strike" has impacted the company's operations. He said some of the company's workers have joined the picketers, some have stayed home and others have continued to work.
"We do have equipment going out, but not to the levels we had before the picketing started," Harrington told RER. "The levels vary from store to store. The picketing is occurring at 13 out of 267 stores, a small percentage of the company, but we want to resolve the issues. We have meetings scheduled with union officials, and we hope to resolve it in the near term."
Harrington said the primary issue is the union's demand that the company voluntarily recognize the union as the sole bargaining agent for RSC employees, including mechanics and delivery personnel. He said RSC believes the best method is to allow employees to decide through a vote if they want union representation.
Union officials claim to be seeking to organize workers who could be adversely affected by a possible takeover of RSC by United Rentals. Harrington, however, contends that if such a sale were to take place, all union agreements would be addressed in the terms and conditions of the sale.
More than 60 percent of injuries suffered in construction equipment repair shops involve the eyes, ahnds or back.
Source: Construction Industry Manufacturers Association