20/07/2006 - 05:00 am

Sunbelt Rentals to Acquire NationsRent

Sunbelt Rentals, Charlotte, N.C., a subsidiary of Ashtead Group plc, announced that it will acquire Fort Lauderdale, Fla.-based NationsRent Companies for approximately $1.05 billion. The transaction is expected to close on or about August 31, 2006. Following the closing, the combined company is estimated to be the third largest United States equipment rental company with 477 locations in 35 states and approximately 7,000 employees.

According to George Burnett, chief executive officer of Ashtead, NationsRent and Sunbelt's fleets are similar in age and equipment variety. He added that the 477 outlets will have very little overlap and accelerates the company's “clustering strategy.”

“This transaction will immediately extend the reach of the combined companies to eight additional states,” said Cliff Miller, chief executive officer of Sunbelt. “The two companies also have very different specialty operations, which are complementary rather than redundant, such as NationsRent's Lowe's retail-based program and its expanding dealership network, along with Sunbelt's pump, power and scaffolding operations. By adding NationsRent's relatively new rental fleet to Sunbelt's already significant investment in fleet, the combined company will feature a rental fleet base of approximately $2.2 billion of original cost.”

At closing, Sunbelt will pay $495 million in cash for the outstanding shares of NationsRent common stock, less transaction expenses incurred by NationsRent. In addition to this cash consideration at closing, NationsRent common stockholders may receive additional payments from a $28 million escrow amount remaining after settlement of any indemnification claims, the remainder of a $5 million reserve account established to cover the costs of any disputed claims, and a “common stock deferred payment” of up to $89 million. In addition, pursuant to the transaction, Sunbelt will assume all of NationsRent's outstanding indebtedness.

In connection with the merger, NationsRent announced yesterday that it will offer to purchase for cash any and all of its outstanding 9-1/2% Senior Notes due May 1, 2015, in an aggregate principal amount of $150.0 million and 9-1.2% Senior Secured Notes due October 15, 2010, in an aggregate principal amount of $250.0 million.

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