28.08.2015

Coates set to take Force

We understand that Coates Hire, which is owned by private equity firms Seven Group and Carlyle has reached an agreement to acquire the assets of Australian access rental company Force Corp.

The word is that Force’s receiver PPB Advisory has accepted an offer worth in the region of $45 million for the assets which include 3,800 aerial lifts. PBB has been marketing Force since it was appointed in July after its secured lender the Challenger Group stepped in when owner Helmsman Capital had failed to find a buyer following talks with Carlyle.

While a deal may have been agreed in principle, negotiations with at least on other interested party are continuing. Force is expected to generate an EBIT of around $17 million in its current financial year and $25 million the following year.

Coates acquired the non access rental assets of Force in 2013, click here to see Coates acquires Force assets Carlyle and Seven group also tried to float and then sell Coates back in 2013 but failed See Coates to refinance

Vertikal Comment

Assuming that this deal completes, Coates, already Australia’s largest rental company, will become a far more significant player in the powered access market. But perhaps the main point for the company’s owners is to remove a competitor and help make the business a more attractive one to sell or return to the stock market (Carlyle took publicly quoted Coates private in 2008). For Force it looks likely to result in a head count reduction of around two thirds.

The biggest winners from this transaction are likely to be those who compete with Force Corp on a regular basis.