United to acquire Ahern
US based United Rentals has agreed the acquisition of Ahern Rentals from Don Ahern and the Ahern family for $2 billion in cash. The transaction is expected to close by year end.
Las Vegas based Ahern Rentals was established in 1953 by John and Martha Ahern. Don Ahern joined the company in the 1970s and launched his own business with eight scissor lifts in 1978, today the company is the eighth largest equipment rental company in North America, with a fleet in the region of 50,000 machines, and around 2,100 employees working from 106 locations in 30 states. In the past 12 months it generated revenues of $887 million, with an EBITDA of $310 million. The vast majority of its fleet it made up of aerial work platforms and telehandlers.
The combination of the United and Ahern fleets will take the United aerial lift fleet to around 180,000 units and its telehandler fleet to somewhere in the region of 34,000 units. The combined business will have revenues of around $12.5 billion.
United hopes to generate around $40 million a year in cost savings, through synergies during the first 12 to 18 months, from areas such as corporate overheads, operations and cost of rentals due to efficiencies of scale. It also hopes to benefit from the increased buying power.
The statement from United said: “Consistent with United Rentals’ ‘grow the core’ strategy, customers of both companies will be better served by the combined scale, and legacy customers of Ahern Rentals will benefit from one stop access to United Rentals’ specialty rental offerings. Ahern Rentals’ customer service footprint of branches, fleet and experienced employees is complementary with United Rentals’ existing network. The combination will increase capacity for United Rentals in key geographies, with concentrations on both U.S. coasts and in the Gulf region. The integration of the acquired branch and sales operations represents significant opportunities to improve efficiency, productivity and new business development with the adoption of United Rentals technology and field management processes. Ahern Rentals and United Rentals use a number of the same technology platforms, including the RentalMan ERP system.”
Don Ahern said: “I’m proud of what we’ve built at Ahern Rentals over nearly seven decades, and I’m extremely pleased that the combination with United Rentals will take the business forward in this next chapter of growth. I want to thank our employees for driving the results that make this transaction possible. This is a strong outcome for both organizations and our customers.”
United’s chief executive Matthew Flannery added: “Our acquisition of Ahern Rentals supports our strategy to deploy capital to grow the core business and drive shareholder value. We view ourselves as the ideal owner of these assets within our network, as customers will benefit from the combination of the two organisations moving forward together. We are leveraging our competencies in larger-scale M&A to augment both our near and long term earnings power.”
“Our integration playbook is underway so we can prepare the acquired branches to take full advantage of our systems and operational capabilities and gain from our employee and customer-centric culture. I look forward to welcoming our new team members upon the closing of the acquisition.”
This has come of a bit of surprise, but makes sense for both companies, for very different reasons. We understand from the statement that the manufacturing businesses, including Xtreme telehandlers and Snorkel aerial work platform are not included in this transaction, neither are any of the Ahern distribution outlets, none of which are part of the acquired company - Ahern Rentals.
We will update this news item and the comment as soon we learn more about the finer details of the deal.