United Rentals Inc. will acquire BlueLine Rental LLC from global investment firm Platinum Equity LLC for about $2.1 billion in cash.
United Rentals expects to use a combination of newly issued debt and bank borrowing to finance the transaction, which is expected to close in the fourth quarter, subject to antitrust clearance and customary conditions.
BlueLine rents equipment for construction, commercial and industrial sectors and has 114 locations in 25 U.S. states, Canada and Puerto Rico. United Rentals expects the acquisition to increase its capacity in large metropolitan areas in North America and add mid-sized and local accounts to its base.
The company also expects the acquisition to be immediately accretive to its adjusted EPS and free cash flow generation, as well as lead to a net leverage ratio of below 3.0x by 2018-end on an as-reported basis.
United Rentals said it will suspend its $1.25 billion share buyback program after closing the acquisition to integrate operations and evaluate other potential uses of capital.
Morgan Stanley & Co. LLC and Centerview Partners served as financial advisers and Sullivan & Cromwell LLP acted as legal adviser to United Rentals. Barclays and Catalyst Strategic Advisors acted as financial advisers and Latham & Watkins LLP served as legal adviser to Platinum Equity.