Preliminary Rental EBITDA, last week, for third quarter 2008 for acquisition target Essex Holdings LLC and subsidiary Essex Crane Rental Corp. were reported last week. Hyde Park Acquisition Corp. also announced that if the acquisition is approved in a Halloween stockholders meeting, Hyde Park will change its name to Essex Rental Corp., seek a NASDAQ listing, and initiate a $12 million stock buyback program.
Last spring, Hyde Park entered into a definitive agreement to acquire privately-held Essex, which owns one of the largest specialized fleets of lattice-boom crawler cranes and attachments in North America. Rental EBITDA for the third quarter of 2008 is expected to increase by 40.9 percent to $12.0 million, excluding a one-time charge of approximately $350,000 associated with the sale of the business to Hyde Park, from $8.5 million in the third quarter of 2007.
2008 Rental EBITDA is forecasted to be $41.1 million, an increase of 12.6 percent from Essex’s initial 2008 Rental EBITDA guidance of $36.5 million. Essex’s management raised its year ending December 31, 2008 Rental EBITDA guidance. For the nine months ended September 30, 2008, Rental EBITDA is expected to increase by 41.4 percent to $32.2 million versus $22.8 million for the same period last year.
Rental EBITDA for the year ending December 31, 2008 is forecasted to be approximately $41.1 million, an increase of 12.6 percent compared to Essex's initial forecast of $36.5 million and an increase of 4.3 percent compared to the high end of their recently revised 2008 Rental EBITDA guidance of $39.4 million.
According to a statement by Hyde Park, growth in Rental EBITDA continues to be driven by strong utilization rates for Essex’s fleet and increasing average monthly crane rental rates, the latter resulting from a mix shift towards higher lift capacity equipment and same crane class rental rate increases on a year over year basis. For the quarter ended September 30, 2008 average monthly crane rental rates increased by 34.4 percent to $22,258 versus $16,563 for the same quarter last year.
“As we proceed toward completing our acquisition of Essex, we are pleased to report that Essex's operating performance continues to exceed the March 2008 projections that the transaction value was predicated on,” stated Laurence S. Levy, Hyde Park chairman and CEO. “Essex’s contractual backlog and new bookings continue to be strong, particularly for its large capacity crawler cranes. This demand continues to support high utilization and pricing above our forecasts for cranes with capacities above 200 tons.”
Levy said the current uncertainty in the credit markets has not had an impact on the company’s fully committed debt facility, “which will enable Hyde Park to both close the Essex acquisition, and provide sufficient liquidity for future growth and investment.”
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