Another $1 billion dollar acquisition for United

US based United Rentals is to acquire Yak Access and its sister company New South Access & Environmental Solutions from private equity firm Platinum Equity for around $1.1 billion in cash. Plus, a possible further $50 million based on reaching certain revenue growth over the next two years.

United is confident enough in the approval process that it expects the deal to close in the next six weeks.
Yak, which was founded in 2017 and is based in Columbia, Mississippi, provides temporary access tracking/matting for heavy equipment such as cranes and truck mounted platforms working in the pipeline, power line, wind and solar power industries. Last year it appointed crane industry veteran Frank Bardonaro as chief executive.

Yak claims to be the leading player in the North American matting industry with a fleet of around 600,000 hardwood, softwood, and composite mats across 40 states. In calendar year 2023 it had revenues of $353 million with an EBITDA of $171 million.
A classic Yak matting job

United says that it will use a combination of new debt and its existing capacity to fund the transaction and related costs.

A statement from United said: “Yak creates a new adjacency for United Rentals’ Specialty business with scale in a large and growing segment. This combination will further the company’s ability to deliver value as a one stop shop for customers. It also provides immediate cross-sell opportunities to both existing and new customers.”

“United Rentals sees significant potential to grow the matting business over the next several years, supported by attractive secular opportunities across both the energy and power markets, funded by public and private investments. The company expects to realize approximately $166 million in net present value of tax benefits included in the $1.1 billion purchase price.

Chief executive Matthew Flannery added: “Our acquisition of Yak further diversifies and differentiates United Rentals’ Specialty business offerings while also driving shareholder returns. This newly created “Matting Solutions” business will create another adjacency for our company with scale in a large and growing market segment. In addition to its attractive profile across growth, margins and returns, this combination builds upon our Power vertical strategy, where significant investment in generation, transmission and distribution is expected over the next several decades.”
Flannery continued, “Yak meets the strategic, financial and cultural criteria we aim for in acquisitions. We expect this new line of business to augment our Specialty offerings as we continue to execute on our strategy of further differentiating ourselves by providing one-stop shop capabilities for our customers. We look forward to welcoming our new team members to the United Rentals family.”

Yak’s Frank Bardonaro Yak added: “Yak is excited to accelerate its business potential as part of United Rentals. This combination will benefit both our customers and existing employees as our established expertise in access solutions complements the broader value proposition United Rentals offers. I’m proud of the leading company we built and am happy we found a great partner for the next chapter.”

Jacob Kotzubei and Matthew Louie of Platinum Equity, said: “Over the past six years we worked with the Yak team to transform the business and are proud that it is now a stronger and more resilient company ready for the next chapter. United Rentals is an outstanding partner and a great long-term fit for Yak going forward.”

Vertikal Comment

Yet another substantial deal from United. It seems that every time its main competitors appear to be gaining on it, at least in revenue terms, it makes another substantial acquisition and jumps ahead again.

This acquisition will take the business beyond the €15.5 billion revenue, level, and given a couple more modest acquisitions - $16 million could be in sight. One cannot but wonder how much bigger a rental company can become.

On the surface it seems to have paid a premium price for Yak, but then it did the same with Ahern Rental at the end of 2022 and that seems to have worked out well, at least in 2023.

See also:
Record year for United
United to acquire Ahern