Check out our 2024 Corporate Sustainability Report!

Volvo Rents Sold to Private Equity Firm | Construction News

The Volvo Group has agreed to sell Volvo Rents to the US private equity firm Platinum Equity for approximately SEK 7.2 billion ($1.1 billion USD). At closing, net financial debt in the Volvo Group’s Industrial Operation is expected to be reduced by the same amount. The transaction is expected have a negative impact on the Group’s operating income of approximately SEK 1.5 billion ($230 million USD) in the fourth quarter of 2013. 
A pre-requisite for completion of the transaction is that Platinum Equity is successful in a debt offering to be made to finance its acquisition. Volvo CE will continue to sell products to Volvo Rents under the new ownership.
“We looked at different alternatives to grow Volvo Rents’ business and concluded that the best alternative is to sell the operation to another owner. Volvo Rents’ business does not have a sufficiently strong connection with the group’s core operation to motivate continued ownership,” says Olof Persson, Volvo Group president and CEO.
The transaction is expected to be closed in the first quarter of 2014 and is at that time expected to have a positive impact on the cash flow for the Volvo Group of $1.1 billion USD (approx. SEK 7.2 billion). The sale of Volvo Rents is expected to decrease the net financial debt for the Industrial Operation by $1.1 billion USD (approx. SEK 7.2 billion), corresponding to a reduction of the net financial debt to equity ratio for the Industrial Operation as calculated per the third quarter of 2013 by approximately 10 percentage points.
Volvo Rents, formed in 2001, offers rental of a comprehensive range of machines intended for the construction and engineering industry, including Volvo CE products. Volvo Rents has operations in the US, Canada and Puerto Rico and has about 2,100 employees. In the first nine months of 2013 Volvo Rents had net sales of $45.9 billion USD (SEK 3.1 billion) and recorded an operating loss of $7.18 million USD (SEK 47 million.
Platinum Equity is a California-based global investment firm with a highly specialized focus on business operations. The firm has significant experience investing in companies that serve the construction, commercial and industrial equipment rental market.
All of Volvo Rents’ employees will remain with the company as it is sold. Volvo Rents’ customers will not be affected by the transaction, and Volvo CE will continue to sell products to Volvo Rents under the new ownership. Completion of the transaction is subject to certain conditions, including the approval of relevant authorities.



Lift & Access is part of the Catalyst Communications Network publication family.