United Rentals to buy Ahern Rentals in $2bn deal

US equipment rental firm United Rentals said on Monday that it has agreed to buy family-owned Ahern Rentals for about $2.0bn in cash.

Founded in 1953, Ahern is the eighth largest equipment rental company in North America, with approximately 2,100 employees and 106 locations in 30 states serving 44,000 customers in the construction and industrial sectors.

For the 12 months ended 30 September 2022, the business generated $310m of adjusted EBITDA on $887m of total revenues.

United Rentals said Ahern’s customer service footprint of branches, fleet and experienced employees is complementary to its own existing network. The combination will increase capacity for United Rentals in key geographies, with concentrations on both US coasts and in the Gulf region, it said.

The deal is expected to generate around $40m of annualised cost synergies within the first 12 to 18 months of closing, primarily in the areas of corporate overhead, operations and cost of rentals due to efficiencies of scale.

Chief executive Matthew Flannery said: "Our acquisition of Ahern Rentals supports our strategy to deploy capital to grow the core business and drive shareholder value. We view ourselves as the ideal owner of these assets within our network, as customers will benefit from the combination of the two organisations moving forward together.

"We’re leveraging our competencies in larger-scale M&A to augment both our near- and long-term earnings power."

The transaction is expected to close prior to year-end 2022.