11.01.2011

Ashtead acquires Empire in the USA

Ashtead’s US subsidiary, Sunbelt Rentals has acquired Empire scaffolding for around $38 million in cash. A further $1.5 million in cash may also become payable depending on Empire's profits in the year to 31 August.

Empire provides specialist scaffold rental, erection and dismantlement services to an industrial customer base in the Gulf Coast petrochemical industries. Based in Baton Rouge, Louisiana it operates through seven branches in the states of Louisiana, Texas, Alabama and Tennessee,

In the year to the end of August 2010 Empire reported revenues of $42 million, with a pre-tax profit of $4 million. Its gross assets at year end were $35 million.

Ashtead’s chief executive Geoff Drabble, said: “We are delighted to conclude this acquisition which is firmly in line with our long term strategy of developing high value added speciality businesses which broaden our product offering and the markets we serve and provide us with significant cross selling opportunities. Empire will operate as a wholly owned subsidiary within Sunbelt's scaffold division with its key managers all remaining with the business."

Empire was founded in late 2001 and quickly expanded to a multi site operation. It has one of the most experienced scaffold management teams in the country with a number of the managers owning part of the equity.

Vertikal Comment

This looks like an excellent move for Ashtead, with energy prices on the rise again this profitable business should provide a reasonable payback with the opportunity to deliver a wider range of products into the growing energy sector.

At the same time it is an excellent pay off for the owners of this business just nine years after starting up in what is considered to be a mature, tough and competitive business. It goes to show that a good profit can be created in even in the most competitive market if the business is well run with dedicated staff providing an exceptional service. Empire has an excellent name for its diligence and safety record, something for which it is clearly able to charge a decent rate for.