18.11.2012

Coates on the block

The majority owners of Australian rental company Coates Hire - Seven Group and private equity firm Carlyle Group, are now both looking to sell their stakes in the country’s largest rental company.

Media and mining group Seven, which is controlled by Kerry Stokes, has appointed Goldman Sachs to sound out potential buyers and carry out a strategic review of the investment. The company said that it was responding to recent inquiries.

Carlyle and Seven each own around 46 percent of Coates and both partners are looking to sell out of the business. Coates was delisted from the Australian stock market when it was bought by National Hire (which is controlled by Seven) and Carlyle for $2.9 billion in 2008.

There was earlier talk that the two owners were planning a $3 billion float of Coates this year, but nervous markets and the current lack of interest in public offerings seems to have caused a re-think.

Seven’s managing director Peter Gammell has said that the process is being driven by Carlyle which recently took a 25 percent stake in Grupo Orguel, one of Brazil’s largest equipment rental companies and has a large stake in Hertz.

In a statement Seven said the strategic review would start immediately and was likely to take several months.

Coates posted revenues of $1.3 billion in the year to June and has 200 branches across Australia.