10.01.2013

Sumitomo ups its stake in Sunstate

Japanese conglomerate Sumitomo has acquired a controlling interest in Arizona based rental company Sunstate Equipment, increasing its holding to 80 percent.

Sumitomo made its $50 million original investment in Sunstate in 2009 at the height of the economic downturn, when it purchased convertible preferred shares in the business. It converted them to common shares last April and has now increased its holding. Click here to see Sumitomo buys into Sunstate.

The company, which also owns SMS in Canada, says that since the original investment was made it has focused on strengthening the partnership with the Sunstate management team, which is led by former owner Mike Watts, while gaining deeper understanding of the industry.

It goes on to say that it believes that “now is the opportune time to expand Sunstate's business because the US equipment rental industry is still fragmented and is expected to grow due to continued increase in the rental penetration.”

Sunstate, which runs a large aerial lift fleet, is the 14th largest rental company in North America with branches in nine states primarily in the southwest.

Sumitomo also owns construction equipment dealerships in North America with annual revenues on the region of $1.7 billion.