Cramo and Ramirent, the two European rental giants based in Finland, have signed a contract to form a joint venture combining Ramirent’s business in Russia and Ukraine and Cramo’s business in Russia, excluding operations in the Kaliningrad region, which will continue as part of Cramo’s Lithuanian operations. Cramo’s Russian operations belong to its Eastern European segment.
The joint venture will be a leading rental services company in the Russian and Ukrainian markets. The consolidated combined net sales of the joint venture in 2012 are estimated at about €52 million, with an EBITDA margin of about 35 percent. The combined entity has about 400 employees and 22 rental branches.
“The Russian and Ukrainian markets offer significant growth potential for equipment rental and through the joint venture we have a strong foundation to invest for accelerated growth,” said Magnus Rosen, president and CEO of Ramirent Plc. “Combining our efforts, we will be able to present a compelling value proposition for both new and current customers, to further develop the rental industry as a whole in these markets.”
“For a few years it has been evident that Russia and Ukraine are in the early phase of developing a modern rental industry,” added Cramo president and CEO Vesa Koivula. “The construction market is huge and the momentum is significant. Taking the lead in the rental industry offers interesting opportunities, but also big challenges. The combined resources of our already successful businesses give us a clear head start and a unique platform for a long-term commitment in Europe’s most interesting region.”
Cramo has nine outlets in Russia, with 2012 volume estimated at €19 million. Ramirent has seven branches in Russia and six in Ukraine, with six more in Ukraine with partners. The company estimates about €33 million in volume for 2012.
The companies expect the transaction to close in early 2013, subject to approval of competition authorities.