December 19, 2011
United Rentals Inc. and RSC Holdings Inc. on Dec. 16 agreed to merge, with plans for United
Rentals to acquire RSC in a cash-and-stock transaction valued at $18 per share, or a total
enterprise value of $4.2 billion, including $2.3 billion of net debt.
The Boards of Directors of both companies have unanimously approved the proposed transaction and recommended that their respective stockholders approve the proposed transaction.
The proposed transaction will create a leading North American equipment rental company with
a more attractive business mix, greater scale and enhanced growth prospects, according to United Rentals.
“The combination is also expected to accelerate United Rentals’ growth with industrial customers as well as provide a lower-cost base and a less-volatile revenue profile to better position the company through all phases of the business cycle,” according to a press release issued by United Rentals. “The new United Rentals is well-positioned to benefit from increased rental penetration, the continued strength of the industrial sector, serving customers across a variety of industries and a recovery in construction activity.”
United Rentals and RSC have already begun working on a plan to facilitate a smooth integration of the businesses and realization of more than $200 million of potential cost savings, according to United Rentals.
“This transaction marks a transformative moment in our company’s history,” Michael Kneeland, president and CEO of United Rentals, said in a written statement. “Combining the experience
and resources of two top performing equipment rental companies creates an exceptional
company. The new United Rentals will build upon the best practices and management teams
from both companies to deliver superior customer benefits and enhanced value for our
stockholders. With the best talent in the industry, we have a tremendous opportunity to become
the supplier of choice for customers throughout North America.”
Erik Olsson, RSC’s CEO and president, added in a pres release, “RSC has a strong track record
of profitable growth and we are proud of what we have built. At the same time, I am confident
that by partnering with United Rentals we can accomplish far more than either company could
have achieved on its own, including significant synergies. As a result, the transaction delivers
significant value to our shareholders. Our similar customer-centric cultures and commitment to
operational excellence will provide even greater value to our customers and facilitate a smooth
integration. I look forward to helping to lead the integration process during a transition period.”