United Rentals is to grow even stronger with an entrance into the European market after announcing the acquisition of BakerCorp, for a fee of approximately US$715 million (€613 million) in cash.
Already the biggest rental company in the world by some stretch, the US-based outfit will add BakerCorp to its offerings, which operates 46 locations across the US and Canada, as well as 11 locations in France, Germany, the UK and the Netherlands. The acquisition provides United Rentals with its first-ever move outside its home territory.
United Rentals last year posted revenues of US$6.34 billion (€5.44 billion), which represents 12% of the world's top 100 rental companies' combined revenues. Despite a string of major acquisitions over the years, it has never invested in a company which operates outside of the US or Canada.
The transaction is expected to close in the third quarter of 2018.
BakerCorp specialises in tank, pump, filtration and trench shoring rental solutions for a broad range of industrial and construction applications. The company recently posted revenues of US$295 million (€253 million) for the 12-month period ending 31 May this year, as well as US$79 million (€68 million) of adjusted EBITDA. BakerCorp employs around 950 people with more than 4,800 customers in North America and Europe.
Through the acquisition, United Rentals will add BakerCorp's 24,000 units to its fleet. United said the combination would create significant opportunities for revenues growth and customer service through cross-selling, re-rent conversion and scale. It added that the combination of BakerCorp's comprehensive solutions across fluid storage, transfer and treatment with United Rentals' Pump Solutions unit would create an increased value proposition for customers across the broader fluid solutions space, with market-leading revenues of approximately US$606 million (€520 million).
Michael Kneeland, CEO of United Rentals, said, "We're very pleased to announce an agreement to acquire BakerCorp, an expert in fluid solutions and a highly regarded, customer-focused operation. We're gaining a terrific team that shares our strong commitment to safety and customer service, and operations that complement our North American pump and trench offerings.
"This transaction will also be our company's first experience in Europe, where BakerCorp has established an attractive, fast-growing business with significant future opportunity."
Kneeland added that United had set a high bar across strategic, financial and cultural metrics when evaluating any acquisition. He said that BakerCorp met every test, with the additional advantage of being primed to benefit from our systems and technology. Kneeland added that United expected the combination to augment its revenue, earnings and EBITDA in 2018, while propelling the growth of one of its most promising specialty segments.
Meanwhile, Bob Craycraft, president and CEO of BakerCorp, said, "I'm extremely proud of what our team has built. The value we've delivered for our customers has created this new opportunity to be part of the largest equipment rental company in the world.
"The combination with United Rentals is an exciting development for the future of both our customers and employees."