United Rentals to make $1B acquisition
STAMFORD — United Rentals, the world’s largest equipment-rental company, announced Thursday night it had agreed to acquire for nearly $1 billion General Finance Corp., a provider of mobile storage and modular office space.
Pasadena, Calif.-based General Finance operates as Pac-Van and Container King in the U.S. and Canada, and as Royal Wolf in Australia and New Zealand. Its network of 106 branches and more than 900 employees serve a number of sectors including construction, energy, retail, transportation, government and education.
“Our acquisition of General Finance will be a significant opportunity for us to further differentiate our value in the eyes of our customers, while providing attractive, long-term returns for our shareholders,” United Rentals CEO Matthew Flannery said in a statement. “We see strong growth potential from this combination, including our ability (to) cross-sell mobile storage and office solutions to our customers. Our expansion into this space comfortably checks all three boxes of our (mergers and acquisitions) criteria — strategic rationale, financial impact and cultural fit.”
The $996 million transaction is expected to close in the second quarter of 2021. In their announcement, United officials cited a target of $65 million of “total revenue synergies” in the three years after the deal closes.
“Our combination with United Rentals — the industry leader in equipment rentals — is a strong outcome for everyone involved,” General Finance CEO Jody Miller said in a statement. “Our customers will benefit from United’s extensive solutions and geographic footprint, and our employees will have new opportunities as part of the largest rental team in the world.”
For United, the deal follows its announcement Wednesday that it had acquired for, an undisclosed amount, Franklin Equipment, which is a provider of equipment rentals, sales and related services in the midwestern and southeastern states. The acquisition adds more than 300 employees to United’s workforce.
Acquisitions have catalyzed United’s growth. In 2018, it acquired equipment-rental firm BlueLine Rental for about $2 billion and liquid-management firm BakerCorp International Holdings for $715 million.
United joined the S&P 500 stock index in 2014 and made the Fortune 500 the same year. It placed No. 340 on last year’s Fortune list.
The company operates with 1,154 rental locations across 49 states and every Canadian province and also runs 11 sites in Europe. Its approximately 18,250 employees serve customers in the construction and industrial sectors, utilities, municipalities, as well as other groups such as homeowners.
Its headquarters are in the First Stamford Place complex in Stamford’s Waterside section, adjacent to Interstate 95 and the Metro-North Railroad’s New Haven line.
“We’re confident the time is right to reengage in M&A with this highly strategic combination, as our end markets recover from the challenges of 2020,” Flannery said. “General Finance is a customer-focused organization with excellent field operators and specialized expertise that complements our own. We look forward to welcoming our new employees and customers as an important part of our future.”