United Rentals to Acquire BlueLine Rental for $2.1B


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United Rentals and BlueLine Rental entered into a definitive agreement under which United Rentals will acquire BlueLine from Platinum Equity for approximately $2.1 billion in cash.

The board of directors of United Rentals unanimously approved the agreement. The transaction is expected to close in Q4/18, subject to Hart-Scott-Rodino clearance and customary conditions.

BlueLine is one of the 10 largest equipment rental companies in North America, serving more than 50,000 customers in the construction and industrial sectors with a focus on mid-sized and local accounts. The company has 114 locations and over 1,700 employees based in 25 U.S. states, Canada and Puerto Rico. For the trailing 12 months ended August 31, 2018, BlueLine generated an estimated $313 million of adjusted EBITDA at a 39.8% margin on $786 million of total revenue.

BlueLine’s footprint will increase United Rentals’ capacity in many of the largest metropolitan areas in North America, including both U.S. coasts, the Gulf South and Ontario. BlueLine has a customer base that aligns well with United Rentals’ base, with a balanced mix of commercial construction and industrial accounts. The combination will add more mid-sized and local accounts to United Rentals’ base. The addition of BlueLine’s fleet will expand United Rentals’ fleet by over 46,000 rental assets with an original cost of approximately $1.5 billion.

The purchase price of approximately $2.1 billion represents a multiple of 6.7x adjusted EBITDA for the trailing 12 months ended August 31, 2018; and a multiple of 5.4x adjusted EBITDA including cost synergies and the net present value of tax attributes estimated at $169 million.

The combination is expected to generate approximately $45 million of cost synergies in the areas of corporate overhead, operations and third-party re-rent, and improve returns on BlueLine used equipment sales.

Additionally, United Rentals expects to realize approximately $15 million of fleet and other procurement savings based on the combined spending.

The transaction is not conditioned on financing. United Rentals expects to use a combination of newly issued debt and bank borrowing to fund the transaction and related expenses.

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Terry Mulreany
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tmulreany@monitordaily.com
Frank Battista
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fbattista@monitordaily.com

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