RSC Equipment Rental Purchased for $3.4 Billion
Atlas Copco has sold a majority stake of RSC Equipment Rental, Scottsdale, Ariz., to New York private equity firms Ripplewood Holdings and Oak Hill Capital Management. The aggregate transaction value is approximately $3.4 billion, plus up to $400 million of additional consideration in the form of notes, based on the achievement of profitability targets through 2008.
According to the Business Jornal of Phoenix, the transaction is one of the highest priced deals in Arizona history. Subject to customary closing conditions and regulatory approvals, the transaction is expected to close prior to year end. Under the terms of the agreement, Atlas Copco is expected to receive approximately $3.3 billion in cash and assumed liabilities and retain an approximate 14.5% stake in the company.
Ripplewood Holdings and Oak Hill Capital will be equal investment partners in the transaction, and both will share investment expertise in the equipment rental industry. Ripplewood Holdings first invested in the equipment rental industry in 1998 with its purchase of heavy equipment rental company ICM Equipment Co. Denis Nayden, managing partner at Oak Hill Capital, was the former CEO and chairman of GE Capital where he oversaw its vast leasing and equipment finance operations.
RSC's current management team will continue to lead the company and invest alongside Ripplewood Holdings, Oak Hill Capital, and Atlas Copco.