02.05.2016

Apollo to acquire and merge Maxim and Amquip

Funds managed by Apollo Global Management have signed definitive agreements to acquire US based crane rental companies AmQuip - from Clearlake Capital Group - and Maxim Crane Works from Platinum Equity.

When completed, Apollo intends to merge Maxim and AmQuip to create the world’s largest crane rental fleet with more than 1,950 cranes. The proposed transactions are subject to regulatory approval and customary closing conditions. Financial terms of the transactions were not disclosed.

Founded in 1967, AmQuip operates from a network of 13 locations across 36 states and claims to have one of the youngest crane fleets in the industry with more than 550 units with lifting capacities ranging from six to 716 tons. Maxim was established in 1966, and runs 1,400 cranes from a network of 31 locations throughout the United States.

The announcement earlier today said that the combined company will include senior executives from each company, and both the AmQuip and Maxim brands will continue as part of the combined organisation. Maxim’s Chief Executive Officer, Bryan Carlisle, is expected to be chief executive of the combined business. With AmQuip chief executive Al Bove continuing to run the AmQuip operation, as well as being a member of the merged company’s management team and taking part in the integration process.

"AmQuip and Maxim share similar cultures and values relating to people, safety and the desire to serve the industry,” said Carlisle. “This combination represents an opportunity for us to build a world class organization with the best people in the crane industry. We intend to run the business in the most effective manner possible, utilizing best practices of both organisations. This partnership will be mutually beneficial to both of our teams and, most importantly, to the customers we serve by providing an enhanced level of service, expertise, equipment and geographic coverage.”

“Our companies know each other well with ties that go back more than 30 years,” added Bove. “The teams on both sides throughout each organization are made up of the most experienced lifting solutions experts in the industry and the ability to work together going forward is exciting for everyone involved.”

Apollo partners Larry Berg and Antoine Munfakh said: “We are tremendously excited by this unique opportunity to combine two premier businesses in the North American lifting services market. Both Maxim and AmQuip have built exceptional reputations and customer relationships through the depth of their employee talent and their commitment to providing the highest levels of customer service. Through this transaction and by leveraging the talent of both companies, we believe the combined organization can deepen and broaden these relationships and better serve its customers’ critical lifting solutions needs. We see many compelling growth and innovation opportunities in the market, and we look forward to bringing Apollo’s resources to bear in helping Bryan and Al achieve their long-term strategic objectives.”

Platinum Equity partner Louis Samson, who led the acquisition of Maxim, added: “We are proud of everything Maxim has achieved during our stewardship. The company today is a fundamentally strong business with great leadership, talented employees, sound business practices and all the tools it needs to help lead the industry for years to come. Maxim has proven its ability to successfully grow organically and through acquisition, and now combining forces with AmQuip is a logical and exciting next step.”

Vertikal Comment

This is not a total surprise rumours were rife back in February but we were assured that there was no substance to the claims. And sure enough it looked as though the project slipped into the long grass, but here we are some two and half months later and the deal is agreed, although not yet completed of course.

Why Apollo wants to buy so heavily into the North American crane market is something of a mystery, although given the current uncertainty and challenges faced by the oil & gas slowdown, it could be that the price and terms were right. And the acquisition of the two leading crane rental companies will certainly provide a substantial and influential stake in what is still a very fragmented market.

The upside potential is high for an investor which is happy to focus on the mid to long term, and the potential for growth/expansion is also promising. It is an interesting move and will be even more interesting to see how bringing the two businesses together pans out. Expect further developments in the months ahead.