United Rentals, Inc. and BakerCorp International Holdings, Inc. announced they have entered into a definitive agreement under which United Rentals will acquire BakerCorp for approximately $715 million in cash.
The boards of directors of United Rentals and BakerCorp have unanimously approved the agreement. The transaction is expected to close in the third quarter.
BakerCorp is a multinational provider of tank, pump, filtration and trench shoring rental solutions for a broad range of industrial and construction applications. The company has approximately 950 employees serving more than 4,800 customers in North America and Europe. For the trailing 12 months ended May 31, BakerCorp generated $79 million of adjusted EBITDA at a 26.9 percent margin on $295 million of total revenue.
The combined company will serve a larger strategic account base with a broader fleet range, including approximately 24,000 units to be acquired at closing, the companies said. The combination is expected to create significant opportunities for revenue growth and customer service through cross-selling, re-rent conversion and scale.
The combination of BakerCorp’s comprehensive solutions across fluid storage, transfer and treatment with United Rentals’ Pump Solutions unit will create an enhanced value proposition for customers across the broader fluid solutions space, with market-leading revenue of approximately $606 million (pro forma trailing 12 months).
The integration of BakerCorp into United Rentals will give the acquired locations access to United Rentals’ systems and technology, as well as process and data-driven efficiencies. The combined operations are expected to create approximately $19 million in direct cost synergies across corporate overhead and shared services.
The transaction is not conditioned on financing. United Rentals expects to use a combination of cash and existing capacity under its ABL facility to fund the transaction and related expenses.
“We’re very pleased to announce an agreement to acquire BakerCorp, an expert in fluid solutions and a highly regarded, customer-focused operation,” said Michael Kneeland, chief executive officer of United Rentals. “We’re gaining a terrific team that shares our strong commitment to safety and customer service, and operations that complement our North American pump and trench offerings. This transaction will also be our company’s first experience in Europe, where BakerCorp has established an attractive, fast-growing business with significant future opportunity.”
Bob Craycraft, president and chief executive officer of BakerCorp, said, “I’m extremely proud of what our team has built. The value we’ve delivered for our customers has created this new opportunity to be part of the largest equipment rental company in the world. The combination with United Rentals is an exciting development for the future of both our customers and employees.”
Centerview Partners acted as financial advisor to United Rentals, and Sullivan & Cromwell acted as legal advisor. Morgan Stanley & Co LLC acted as financial advisor to BakerCorp, and Fried Frank acted as legal advisor.