11.11.2019

It’s Boels for Cramo

Cramo, the Finnish international rental group has confirmed that the Dutch international rental company Boels is the company bidding to acquire it.

The offer of €13.25 cash per share values Cramo at around €592 million and representing a premium of 31.2 percent compared to the closing price on November 4th, the Cramo board has unanimously decided to recommend the deal. see who is bidding for Cramo?

Some major shareholders, including EQT Public Value Investments, Rakennusmestarien Säätiö and Varma Mutual Pension Insurance as well as Cramo chief executive Leif Gustafsson, representing almost 19 percent of Cramo’s equity have already accepted the offer.

The deal is subject to acceptance by holder of 90 percent of Cramo’s shares by mid January. Boels has put the required funding in place to complete the deal.
Founded in 1977 Boels claims to be the largest general equipment rental company in the Netherlands, but now operates from 450 locations in 11 countries with 4,200 employees. It has doubled its revenues every five years and is now looking for more growth.

Cramo operates from 300 locations across 11 countries with revenues of €362 million. The combination of the two companies will create a business with revenues of around €1.25 billion and 750 locations. The plan is to combine the companies operations in Central Europe to create a market leading business in the region. While other markets will add or extend the two companies geographic coverage.

Boels chief executive Pierre Boels said: “Our vision is to build a European leader in the equipment rental market. We have a strong conviction in the strategic combination of Boels and Cramo. The combined company will be a leading player in Europe with a business in 17 countries, and a top three position in 12 of those. It will be well diversified in terms of customers, business and geographies. We combine rental equipment, data, safety and expertise to improve customer efficiency. Our companies know each other well and have a good fit both strategically and culturally. We share the same strategy, focusing on building scale locally to secure leading positions in the countries where we operate. And we both hold our employees in high regard. Boels appreciates the unanimous recommendation by the Board of Cramo. We look forward to building a shared future together.”

Cramo chairman Veli-Matti Reinikkala added: “During the last years, we have worked hard to create value for our shareholders. The demerger and spin-off of Adapteo was an important step to create two independently focused and attractive companies, resulting also in released shareholder value. For stand-alone Cramo, this has created the opportunity to take part in the ongoing and important consolidation in Europe. Boels is in that regard an excellent owner of and partner to Cramo. We also believe that for our existing shareholders, the Offer Price represents an attractive cash premium and is a reflection of the trust Boels has in Cramo as a company and the strategy moving forward as one company. Taking into consideration all aspects for all stakeholders, the Board of Directors of Cramo has unanimously decided to recommend that shareholders of Cramo accept the Tender Offer.”

Cramo’s Leif Gustafsson said: “Over the past year all our employees have worked hard to position Cramo in the best possible way for the future. The demerger of our company was an important milestone in creating a pure equipment rental focused Cramo. We have now reshaped the company, launched a new strategy, taken the right steps to improve performance and set the foundation to differentiate ourselves from the competition. This work has paid off. Now the combination with Boels, which we respect a lot, gives us the opportunity to take the next step in our commitment to serving the interests of our clients, employees and other stakeholders. Together with Boels we will make a leap forward to become a European leader in our industry.”

UPDATE
December 19th - Boels has confirmed that it has now received all regulatory approvals for the full takeover of Cramo, and now waiting on its offer to close on January 9th. If 90 percent of shareholders have accepted the offer it will go ahead to completion - probably later that month.

Vertikal Comment

This is a very interesting move for Boels which takes it firmly into the big league of global rental companies, joining fellow European's TVH and Loxam, while leapfrogging Kiloutou which is also looking to catch up with the big two European players. At one time both Finnish international rental groups - Cramo and Ramirent – were contenders for the top of this 'league', and yet now it looks as though both will have been swallowed up in the same year.

Is this good, bad or indifferent for the European rental market?
It offers advantages for the increasing number of contractors who are working all over Europe, as well as European market integration. It will inevitably also throw up opportunities for small to medium sized rental companies that can appeal to those contractors that simply do not want to deal with a global mega business, by offering a stronger local service and presence.

We will update this comment when we have had time to digest more of the details.