17.08.2017

United takes Neff

United Rentals has emerged as the mystery counter bidder for Neff Equipment, offering $25 a share – roughly $1.3 billion, topping the previously accepted offer from H&E Equipment by $4 a share. United is also paying H&E the $13.2 million break fee. See Neff gets a better offer

Neff is expected to add around $419 million of annual revenues and to be cash positive for United from the start. United hopes to make at least £35 million of synergy savings within two years. $25 million of that coming from coprorate overhead. Neff operates from 69 locations with 1,170 employees.
The deal is expected to close during the fourth quarter.

Neff chief executive Graham Hood said: "United Rentals is an industry leader in equipment rentals, and as a result of this transaction, our employees and customers will benefit from the combined company's expanded geographic footprint and diversified offering."

United’s chief executive Michael Kneeland added: “The acquisition of Neff is a significant opportunity for us to augment long-term returns for our investors, and build value for our customers and employees. We expect this transaction to be accretive to both our financial performance and customer-facing operations, with an important cross-selling component. The strategic rationale passed every litmus test with flying colours.”

“With the successful integration of NES largely behind us, we’re prepared to move forward with another smooth transition in our landmark 20th year. We’re excited to realise the opportunities of this combination and leverage the many areas where we’re stronger together. Neff has a customer-focused team with seasoned field operators, a rigorous commitment to safety, and specialized

Vertikal Comment

We certainly did not see this one coming, in spite of the size of United this deal will broaden its product offering considerably, as it adds a large amount of earthmoving equipment to a fleet which is quite heavily tilted towards aerial work platforms and telehandlers etc…

In addition to the chance to expand its earthmoving fleet, particularly for larger excavators - United will be keen to bring the Neff staff on board, given the company has a a reputation for good people with relatively low employee turnover and a great depth of experience. Conversely United can offer some better facillities, and a wider fleet for additional cross selling. H&E will be regretting the 'Go shop' clause at this stage, while Ashtead may well be regretting a missed opportunity.

A clever and well executed manoevre from United.... Interesting times.