05.09.2012

Carlyle buys into Brazilian rental business

Private equity firm the Carlyle Group has acquired a 25 percent stake in Grupo Orguel, one of Brazil’s largest equipment rental companies.

Orguel is currently controlled by the Guerra Lages family, which will maintain its majority ownership the company rents a range of construction equipment from 75 locations across 11 states in Brazil.

Funding for the deal, the terms of which were not disclosed, will be provided by Carlyle’s South America Buyout Fund and a local fund Fundo Brasil de Internacionalização de Empresas FIP (FBIE) which is advised by Carlyle and Banco do Brasil.
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Carlyle is an active participant in the rental and the crane and access markets, it owns a large slice of Australia’s largest rental company Coates, and has a significant stake in Hertz. It also agreed to acquire Chinese crane company XCMG back in 2005, although that deal struggled to gain government approval.
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Grupo Orguel was founded in 1963 by Fabio and Franscisco Guerra Lages as a construction equipment distributor in the state of Minas Gerais. In the 1970’s the company pioneered construction equipment rental in Brazil and it has expanded into manufacturing, while becoming one of the largest rental companies in Brazil, employing over 2,300. Products include aerial lifts - through a specialist division Orguel Plataformas, scaffolding, hoists, generators and a wide range of tools.

Fernando Pinto, a principal on Carlyle’s South America Buyout team, said: “Grupo Orguel’s exposure to the fast-growing infrastructure, home building and oil & gas markets in Brazil and its long-track record of growth and profitability attracted us to this investment opportunity.”

Fernando Borges, head of Carlyle’s South American Buyout team added:
“We have found in the Guerra Lages family the ideal partner for a growth capital investment in a sector which will benefit strongly from Brazil’s economic development.”

Orguel’s chief executive Sergio Fagundes Guerra Lages, said: “This investment represents an important moment for Grupo Orguel. As we prepare to celebrate our 50th anniversary next year, Brazil is going through an unparalleled moment of intense investments in infrastructure, home building and oil & gas. Such projects will continuously require a broad range of high quality and properly maintained equipment. Carlyle’s industry expertise in equipment rental and its global reach will be instrumental in supporting Orguel in its mission to provide the best equipment and the highest level of service to our customers.”