Published on 15 Nov 2022 on Zacks via Yahoo Finance
United Rentals (URI) to Acquire Privately Held Ahern Rentals
United Rentals, Inc. URI has signed a deal to acquire the assets of family-owned Ahern Rentals, Inc. This all-cash deal — which is valued at $2 billion — will boost capacity for United Rentals in key geographies, with concentrations on both U.S. coasts and in the Gulf region. The transaction is expected to close prior to 2022-end.Shares of United Rentals gained 2.5% on Nov 14, 2022.Matthew Flannery, chief executive officer of United Rentals, said, "Our acquisition of Ahern Rentals supports our strategy to deploy capital to grow the core business and drive shareholder value. We view ourselves as the ideal owner of these assets within our network, as customers will benefit from the combination of the two organizations moving forward together. We’re leveraging our competencies in larger-scale M&A to augment both our near- and long-term earnings power."
Buyout Synergies
Ahern Rentals is the eighth-largest North American equipment rental company, serving approximately 44,000 customers in the construction and industrial sectors. It operates across 106 locations in 30 states and has generated $310 million of adjusted EBITDA on $887 million of total revenue during the trailing 12 months ended Sep 30, 2022.The combined entity will enhance the fleet available to United Rentals customers by more than 60,000 rental assets with an original cost of $1.85 billion and approximately $145 million of the non-rental fleet. Again, more than 75% of Ahern Rentals’ rental fleet is comprised of high-demand aerial and material handling equipment.URI will be pausing its $1.25 billion share repurchase program during the early stages of its Ahern integration and expects to realize $60 million of annual revenue synergies by three years, driven by the cross-selling of its specialty rental offerings to an expanded customer base. United Rentals said the deal is expected to increase earnings per share in the first year after closing.