United Rentals Inc. announced it will add BlueLine Rental to its growing list of acquisitions, entering an agreement to purchase it from Platinum Equity for about $2.1 billion in cash.
The board of directors of United Rentals, headquartered in Stamford, Connecticut, unanimously approved the agreement. The transaction is expected to close in the fourth quarter of 2018, subject to Hart-Scott-Rodino clearance and customary conditions.
BlueLine is one of the 10 largest equipment rental companies in North America, serving over 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 that ended Aug. 31, BlueLine generated an estimated $313 million of adjusted EBITDA at a 39.8% margin on $786 million of total revenue.
The deal will increase United Rentals’ footprint in many of the largest metropolitan areas in North America, including both U.S. coasts, the Gulf, and Ontario.
The acquisition will also add more mid-sized and local accounts to United Rentals’ base; broaden the range of fleet and services available to BlueLine customers; and expand United Rentals’ fleet by over 46,000 rental assets
BlueLine and United Rentals share many of the same technology systems, including RentalMan for field operations, and have similar rental infrastructures, which will aid the integration.
“The acquisition of BlueLine meets all of our criteria for long-term, profitable growth at attractive returns,” said Michael Kneeland, CEO of United Rentals. “We’re executing our strategy of ‘growing the core’ in a strong demand environment to drive superior value for our customers and shareholders. Our company will be going to market with more talent, capacity and customer diversification than ever before.”
Kneeland says there are distinct advantages to the BlueLine deal.
“BlueLine has a fleet mix that complements our own, and a well-diversified base of mid-sized and local customers, many of whom can use our specialty solutions,” he says. “We expect to complete the acquisition in the fourth quarter, setting the stage for an exciting 2019. I look forward to welcoming our new colleagues very soon.”
United Rentals plans to pause its current $1.25 billion share repurchase program upon closing the BlueLine acquisition to integrate the operations and assess other potential uses of capital. This is consistent with the company’s approach during the integrations of NES Rentals and Neff Rental in 2017.
The company will update its 2018 financial outlook to reflect the combined operations upon completion of the transaction.
For more information, visit unitedrentals.com.