23.07.2007

United Rentals acquired

United Rentals the world’s largest rental company, and operator of the worlds largest fleet of aerial work platforms has agreed to be bought by Cerberus Capital Management for $6.6 billion, including $2.6 billion of existing debt.

Cerberus will pay $34.50 in cash for each share of United Rentals, a 25 percent premium on the closing price of April 9, the day before United offered itself for sale.

Bradley Jacobs chairman of United Rentals said: "We're pleased that our strategic alternatives process has resulted in this favorable agreement for our shareholders."

"This transaction is a credit to the thousands of United Rentals employees who have created unmatched value in our industry. A decade ago we started United Rentals with little more than a concept and achieved industry leadership in just 13 months. Today we remain the preeminent equipment rental company in the world."

United Rentals announced that it was seeking strategic alternatives on April 10th, after its share price dropped 22 percent in 12 months as it continued to be dogged by restatement of previous year’s earnings following accounting errors and questionable accounting practices.

The company operates from just under 700 locations in the U.S., Canada and Mexico, with 12,000 employees and revenues in 2006 of $3.65 billion. Its fleet is valued at approximately $4 billon at original equipment cost with average age of 39 months.

The board of directors of United has approved the deal and is recommending it to shareholders.

Terms of the transaction allow United to continue to seek alternative offers for up to 30 days.

Cerberus is a New York-based buyout firm with around $25 billion under management; it also has an office in London.