28.05.2006

NES to be acquired by venture capital firm

NES Rentals Holdings, Inc, (National Equipment Service) of the USA, one of the worlds largest aerial and general equipment rental companies has announced that it has signed a definitive agreement to be acquired by Diamond Castle Holdings, LLC, a New York-based private equity firm.

The transaction is valued at approximately $850 million including the assumption of certain liabilities. NES had revenues last year of $582 million, an operating income of $33 million and a net loss of $3 million.

Under the terms of the deal, Diamond Castle will acquire all of the outstanding common stock of NES Rentals for $18.75 per share in cash. The purchase price per share represents a 42% premium on the closing price of NES stock as of January 12th, 2006, the day on which the Company announced it would explore strategic alternatives.

The company emerged from chapter 11 Bankruptcy in February 2004, having paid off all of its suppliers in full. After appointing Andrew Studdert, chairman and chief executive, it retained Bear, Stearns & Co. Inc in late December to assist in reviewing strategic alternatives, including the sale of the Company.

NES operates the worlds fourth largest fleet of aerial lifts, with around 17,000 units, it is only topped by United Rentals, RSC and the Ashtead group. It operates from 120 locations in North America.

Castle Holdings was founded in 2004 by Larry Schloss, the former head of CSFB Private Equity and chairman of DLJ Merchant Banking Partners, and four former managing directors of DLJ Merchant Banking.

Diamond Castle has 22 employees located in New York and focuses on investments in the power, financial services, media, telecom, healthcare, and industrial sectors.

NES chief executive Andrew Studdert said “As part of this effort, the Board undertook a wide-ranging auction process ultimately resulting in the decision that the offer from Diamond Castle is in the best interests of the Company and its shareholders. When completed, this deal will allow NES Rentals to continue to meet and exceed the high standards we’ve established for customer service, quality equipment and financial growth.”

Completion of the sale is expected within 60 days and is contingent upon regulatory approvals, delivery of the committed financing, and the approval of NES Rentals’ stockholders. NES has scheduled a special meeting of shareholders to vote on the proposed transaction for June 23, 2006.

Studdert has agreed to remain in his current capacity following the completion of the transaction. Diamond Castle expects to retain NES Rentals’ company name, management team and product lines.