Nesco Holdings, a leading provider of specialty rental equipment to the electric utility, telecom and rail end-markets, today announced that it has reached a definitive agreement to acquire Minnesota-based Truck Utilities Inc., a specialty rentals, service and truck upfitting company serving the electric transmission, distribution, telecom and other regional end-markets. The transaction, for $42.2 million, is expected to be immediately accretive to earnings per share.
Truck Utilities has been family owned and operated for more than 50 years. The company provides specialized fleet and equipment, service, upfit, parts, tools and accessories to the Upper Midwest region from its three facilities located in St. Paul, Min., Fargo, N.D., and Kansas City. Truck Utilities' current fleet includes 132 specialty units with an average age of 2.3 years, and original equipment cost of $44 million.
"We have known and interacted with Truck Utilities and its president, Craig Capeder, for over a decade,” said Lee Jacobson, CEO of Nesco. “Nesco and Truck Utilities share a common commitment to providing customers best-in-class specialty equipment, responsiveness and world-class service in the markets we serve. This transaction will provide our combined customer base with access to a young, growing fleet of specialty equipment, parts and accessories, in addition to enhanced upfit capabilities and an expanded services radius."
"Nesco and Truck Utilities are complementary businesses with compelling synergies," said Craig Capeder, president of Truck Utilities. "Nesco is great partner, one with the resources to further strengthen our position in the markets we serve. We are excited by the opportunities for growth that lay ahead."
The purchase price of $42.2 million remains subject to adjustment based on the finalization of Truck Utilities' financials for the period ended September 30, 2019 and certain capital expenditures to support fleet additions as well as other customary adjustments. The company plans to finance the transaction by accessing its $350 million asset-based credit facility and the transaction is expected to improve Nesco's leverage metrics on a pro forma basis, including anticipated synergies.
The transaction is subject to customary closing conditions, including the completion of an accounting review of Truck Utilities financial data for its fiscal year ending September 30, 2019, satisfactory to Nesco. We will provide updated full-year guidance, including impact of this transaction, when we report our third quarter 2019 results in early November. The parties anticipate closing the transaction during the fourth quarter 2019.
Nesco Specialty Rentals, based in Fort Wayne, Ind., is No. 18 on the RER 100.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.