Vice President, Investor Relations
United Rentals to Acquire BakerCorp
Expands specialty rentals in
BakerCorp is a leading multinational provider of tank, pump, filtration
and trench shoring rental solutions for a broad range of industrial and
construction applications. The company has approximately 950 employees
serving more than 4,800 customers in
The company plans to update its 2018 financial outlook to reflect the combined operations after the transaction is complete.
Strong Strategic Rationale
- BakerCorp’s 75-plus years in business have created strong, blue-chip customer relationships in the industrial and construction sectors. The combined company will serve a larger strategic account base with a broader fleet range, including approximately 24,000 units to be acquired at closing. The combination is expected to create significant opportunities for revenue growth and customer service through cross-selling, re-rent conversion and scale.
The combination of BakerCorp’s comprehensive solutions across fluid
storage, transfer and treatment with United Rentals’ Pump Solutions
unit will create an enhanced value proposition for customers across
the broader fluid solutions space, with market-leading revenue of
$606 million(pro forma trailing 12 months).
The integration of BakerCorp into
United Rentalswill give the acquired locations access to United Rentals’ systems and technology, as well as process and data-driven efficiencies. The combined operations are expected to create approximately $19 millionin direct cost synergies across corporate overhead and shared services.
BakerCorp’s international operations, which accounted for
approximately 15% of total revenue for their fiscal year ended
January 31, 2018, provide an attractive entry into select European markets for the rental of fluid solutions. United Rentalsand BakerCorp share many cultural attributes, including exemplary safety records, highly engaged employees, deep industry expertise and a commitment to help customers succeed through cost-efficient, productive solutions. United Rentalswill acquire BakerCorp for a purchase price of approximately $715 millionin cash. This represents a multiple of 9.0x adjusted EBITDA for the trailing 12-month period ended May 31, 2018, and an adjusted purchase multiple of 6.6x, including tax benefits and cost synergies.
The acquisition is expected to be accretive to adjusted earnings per
share with an attractive internal rate of return and run-rate ROIC
exceeding cost of capital within 36 months after closing. The company
expects its net leverage ratio to be approximately 2.5x at year-end
2018 and remains committed to executing its recently announced
$1.25 billionshare repurchase authorization.
The transaction is not conditioned on financing.
United Rentalsexpects to use a combination of cash and existing capacity under its ABL facility to fund the transaction and related expenses.
Kneeland continued, “We set a high bar across strategic, financial and cultural metrics when evaluating any acquisition. BakerCorp met every test, with the additional advantage of being primed to benefit from our systems and technology. We expect the combination to augment our revenue, earnings and EBITDA in 2018, while propelling the growth of one of our most promising specialty segments.”
Presentation and Conference Call / Webcast
A presentation about the transaction is available on the Investor
Relations section of United Rentals’ website under the “Investor
Presentations” tab. The company will discuss the planned acquisition on
a conference call today,
BakerCorp’s adjusted EBITDA is a non-GAAP financial measure as defined
under the rules of the
BakerCorp is a multinational provider of tank, pump, filtration and
trench shoring rentals, with a national network in
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and the Private Securities Litigation Reform Act of 1995, known
as the PSLRA. Forward-looking statements involve significant risks and
uncertainties that may cause results to differ materially from those set
forth in the statements. These statements are based on current plans,
estimates and projections, and, therefore, you should not place undue
reliance on them. No forward-looking statement, including any such
statement concerning the completion and anticipated benefits of the
proposed transaction, can be guaranteed, and actual results may differ
materially from those projected.
The foregoing list of factors is not exhaustive. You should carefully
consider the foregoing factors and the other risks and uncertainties
that affect the businesses of