United Rentals has announced it plans to acquire BakerCorp for about $715 Million in cash, marking its first steps into the European market.
BakerCorp is a multinational provider of tank, pump, filtration and trench shoring rental equipment for a variety of industrial and construction applications.
The company has about 950 employees serving more than 4,800 customers in North America and Europe. The company largest presence is in Canada and the United States, where it has 46 locations, with another 11 locations in France, Germany, the United Kingdom and the Netherlands.
The boards of directors of both United Rentals and BakerCorp unanimously approved the acquisition. The transaction is expected to close in the third quarter of this year.
“We’re very pleased to announce an agreement to acquire BakerCorp, an expert in fluid solutions and a highly regarded, customer-focused operation. We’re gaining a terrific team that shares our strong commitment to safety and customer service, and operations that complement our North American pump and trench offerings,” said Michael Kneeland, chief executive officer of United Rentals.
“This transaction will also be our company’s first experience in Europe, where BakerCorp has established an attractive, fast-growing business with significant future opportunity.”
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BakerCorp’s rental fleet consists of more than 24,000 units, including steel tanks, polyethylene tanks, roll-off boxes, pumps, pipes, hoses and fittings, filtration units, tank trailers, berms and trench shoring equipment.
In the last year, BakerCorp generated about $79 million, at a 26.9 per cent margin on $295 million of total revenue. The company’s international revenue accounts for about 15 per cent of its business.
“I’m extremely proud of what our team has built. The value we’ve delivered for our customers has created this new opportunity to be part of the largest equipment rental company in the world,” said Bob Craycraft, president and chief executive officer of BakerCorp. “The combination with United Rentals is an exciting development for the future of both our customers and employees.”
The integration of the two companies will provide the acquired locations access to United Rentals’ systems and technology, as well as its processes. The combined operations are expected to create about $19 million in direct cost savings across corporate overhead and shared services.
“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,” Kneeland said. “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.”