One Source Equipment Rentals Acquired by Private Equity Firm
Private equity firm Oakmont Acquisition Corp., Bloomfield Hills, Mich., announced it has entered into a definitive agreement to acquire substantially all of the operating assets of One Source Equipment Rentals, LLC, one of the Midwest's largest independent construction equipment rental companies. The acquisition also includes One Source's related entities, such as One Source Equipment Rentals of Lafayette, LLC; One Source Equipment Rentals of Dayton, LLC; One Source Equipment Rentals of Morton, LLC; One Source Equipment Rentals of Decatur, LLC; and One Source Equipment Rentals of Granite City, LLC.
Subject to post-closing working capital adjustments, the acquisition totals approximately $41 million, which will include $16 million in cash paid to One Source's debt and a subordinated promissory note for approximately $1.2 million. One Source may elect to take a portion of the cash consideration in common stock of Oakmont. Oakmont will also assume $24 million of One Source's debt. The transaction is anticipated to close this fall.
Management of the acquired companies, including Steve Micheletti, chief operating officer, and Bill Irvine, president, will remain essentially unchanged following the acquisition. After the deal is closed, Irvine said the new company will aggressively grow its business, including opening new branches and acquiring existing business.
Based on 2005 rental revenues, One Source ranked 81 on the RER 100 for 2005 and maintains a fleet of more than 2,500 pieces of equipment with the average age of 36 months and an original cost of approximately $42 million. For the fiscal year ended December 31, 2005, One Source generated net revenue of approximately $20.2 million, which produced unadjusted EBITDA of approximately $8.3 million. From fiscal year 2002 through fiscal year 2005, net revenue increased at a compound annual rate of approximately 13.8% and unadjusted EBITDA grew at an annual rate of approximately 24.1%.