In a news release issued April 30, 2012, leading construction equipment rental company United Rentals (NYSE:URI) announced it had completed its acquisition of competitor RSC Equipment Rental, thus combining the two largest equipment rental companies in North America.
In a letter to customers confirming the merger, United Rentals CEO Michael Kneeland pledged to combine the strengths and expertise of each business with the goal of building a new best-in-class equipment rental company.
Kneeland wrote that the combined operations would seek to provide unmatched service and value by offering:
Kneeland went on to explain that going forward as the two companies are working to integrate their systems, customers will still have access to all of the same products and services as existed before the merger. He also stated that until further notice, customers will continue receiving invoices from the separate companies as they have in the past.
The acquisition is expected to enhance United Rentals’ growth prospects in the current uncertain economic climate. Commercial and industrial equipment needs are increasingly being met by renting equipment as an alternative to the purchase of it which requires significant capital expenditure.
The massive deal is being financed through a combination of United Rentals’ stock and cash. The cash portion will be generated by new debt issuance and drawing on current loan resources. United Rentals expects to retain its current corporate credit rating.
Prior to the merger, RSC was a highly respected enterprise and was attractive as an acquisition target due to its well-managed fleet, extensive customer support resources and a strong geographic presence. Acquiring RSC brings into United Rental’s stable an estimated $2.7 billion of additional equipment and over 400 rental locations in the United States and Canada.
For additional information, visit the United Rentals web page explaining the merger at http://rsc-merger.ur.com/.