subscribe to ENR magazine subscribe
contact us
advertise
careers industry jobs
events events
FAQ
Dodge Data & Analytics
ENR Logo
SUBSCRIBE TODAY
& receive immediate web access
comment

Merger Complete, Will United and RSC Get A New Name?

Text size: A A

United Rentals Inc. finalized its $4.2 billion in cash-and-stock purchase of RSC Holdings Inc. on April 30. The deal—first announced in December—includes $2.3 billion in assumed net debt. It is believed to be the largest equipment-rental company merger in history. In part due to the significance of the deal, company executives say they are weighing a possible name change.

The purchase received 83% shareholder approval. The deal gives RSC shareholders $10.80 in cash per share and 0.2783 of a share of United common stock in exchange for their shares. RSC, as a result, will have a 30% ownership of the combined company, plus three newly created positions on United's 11-member board.

In conjunction with the closing, RSC's Matt Flannery has been named executive vice president and chief operating officer of the combined company. He will oversee the RSC merger process, which entails integrating 4,700 employees in 446 rental locations across 43 states and three Canadian provinces. The consolidation will shutter between 50 and 100 branches, saving an estimated $200 million in annual operating expenses.

The merger creates a rental juggernaut: Its 15% market share is three times the size of the next-closest competitors, Sunbelt and Hertz, says Nicholas Coppola, an analyst with Thompson Research Group (ENR 4/9 p. 20). RSC had $1.52 billion in revenue in 2011, or 23.3% more than in 2010, while United had $2.61 billion in revenue for a 16.7% increase over the previous year. United was ranked as the nation's top rental company in 2011, according to Rental Equipment Register magazine, with RSC as a close runner-up.

The merger boosts United's industrial revenue to 35% from 15% of sales, which is a key component of its long-term strategy since industrial projects typically last longer, making them less susceptible to the boom-and-bust realities of other markets.

Meanwhile, United plans to buy back $200 million of its common stock while implementing an across-the-board 5% rental rate increase in 2012. RSC represents the largest acquisition in United's 15-year history.

Keywords:

----- Advertising -----
  Blogs: ENR Staff   Blogs: Other Voices  
Critical Path: ENR's editors and bloggers deliver their insights, opinions, cool-headed analysis and hot-headed rantings
Project Leads/Pulse

Gives readers a glimpse of who is planning and constructing some of the largest projects throughout the U.S. Much information for pulse is derived from McGraw-Hill Construction Dodge.

For more information on a project in Pulse that has a DR#, or for general information on Dodge products and services, please visit our Website at www.dodge.construction.com.

Information is provided on construction projects in following stages in each issue of ENR: Planning, Contracts/Bids/Proposals and Bid/Proposal Dates.

View all Project Leads/Pulse »

 Reader Comments:

Sign in to Comment

To write a comment about this story, please sign in. If this is your first time commenting on this site, you will be required to fill out a brief registration form. Your public username will be the beginning of the email address that you enter into the form (everything before the @ symbol). Other than that, none of the information that you enter will be publically displayed.

We welcome comments from all points of view. Off-topic or abusive comments, however, will be removed at the editors’ discretion.