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United Rentals Completes RSC Acquisition

United Rentals Inc. has officially acquired RSC Holdings Inc. in a cash-and-stock transaction valued at $18.00 per share at the time of announcement, for a total enterprise value of $4.2 billion, including $2.3 billion of net debt.


The combined companies will accelerate its potential for growth with industrial customers, as well as provide a lower cost base and less volatile revenue profile, which is expected to better position the combined company through all phases of the business cycle. The newly merged company will be called United Rentals.


Jenne K. Britell will remain chairman of the board of directors of United Rentals. Directors of the combined company will be comprised of the existing United Rentals directors and three of RSC’s independent directors, James Ozanne, Pierre Leroy, and Donald Roof, who were elected to the board, effective today.


As part of the RSC acquisition, the company merged all of RSC’s U.S. domestic subsidiaries, including RSC’s principal operating subsidiary RSC Equipment Rental, Inc., and certain of the company’s existing subsidiaries, including United Rentals Northwest Inc. and United Rentals (North America), Inc., into a newly formed operating company. Upon completion of the subsidiary reorganization, the new company became URI’s sole-operating subsidiary in the United States and was renamed United Rentals (North America), Inc. (“New URNA”).


In connection with the closing of the transaction, the board of directors approved a new share repurchase program of up to $200 million of the company’s common stock. Under this program, the company may purchase shares of common stock in open market transactions or in privately negotiated transactions. The approved program has no expiration date, but the Company expects that the share repurchase program will be completed as market conditions allow within 18 months after the closing of the transaction. The actual number and timing of share repurchases, if any, will be subject to market conditions and applicable Securities and Exchange Commission rules.


Under the terms of the merger agreement, each outstanding share of RSC common stock has been converted into the right to receive $10.80 in cash, without interest and less any applicable withholding taxes, and 0.2783 of a share of United Rentals common stock. As a result of the merger, RSC’s common stock will no longer be listed for trading on the New York Stock Exchange.



In connection with the completion of the combination, the proceeds from the $1,325 million aggregate principal amount of 7.625 percent senior unsecured notes due 2022, $750 million aggregate principal amount of 7.375 percent senior unsecured notes due 2020 and $750 million aggregate principal amount of 5.75 percent senior secured notes due 2018 issued by UR Escrow Financing Corporation (“UR Financing”) on March 9, 2012, were released from escrow. A portion of the net cash proceeds from the notes offerings was used to pay the cash portion of the consideration paid to RSC’s stockholders in connection with the combination. The company used additional proceeds from the notes offerings to fully repay RSC's senior secured asset based loan revolving facility in the amount of $549.6 million, satisfy and discharge $400 million principal amount of RSC's 10% senior secured notes due 2017, satisfy and discharge $503 million principal amount of RSC's 9.50 percent senior notes due 2014 and pay related transaction fees and expenses.


At the consummation of the combination, New URNA also assumed pre-existing indebtedness of UR Financing and United Rentals (North America), Inc., as well as certain unsecured debt obligations of RSC’s subsidiaries. These include the obligations under the UR Escrow Financing notes, RSC’s $200 million aggregate principal amount 10.25 percent  senior notes due 2019 and RSC’s $650 million aggregate principal amount 8.25 percent  senior notes due 2021 and United Rentals (North America), Inc.’s secured asset based loan facility, 1 7/8 percent convertible senior subordinated Notes due 2023, 10.875% senior notes due 2016, 9.25 percent senior notes due 2019 and 8.375% senior subordinated notes due 2020. Subject to certain exceptions, New URNA’s assumed obligations will be guaranteed on a senior unsecured basis by URI and New URNA’s current and future domestic subsidiaries.


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