Cerberus to buy United Rentals for $4 billion
24 Jul 2007
Equipment rental company United Rentals Inc. said it accepted a $4 billion takeover bid from private equity fund Cerberus Capital Management LP.
The deal is worth $34.50 a share, representing a 6.6 per cent premium to the company''s closing price on Friday, including $2.6 billion in debt, thereby adding up to a total value of $6.6 billion.
United Rentals'' board of directors has approved the takeover, which is still to be ratified by shareholders.
UBS Investment Bank was advisor to Greenwich, Connecticut-based United Rentals, which has over 690 rental locations across 48 states, Canada and Mexico, and rents everything from backhoes and excavators for demolitions, to welders and generators required for pipe fabrication.
Cerberus, is also in the process of acquiring auto major Chrysler Group in a $7.4 billion deal, and is not the only private equity fund to show interest in the equipment rental sector.
Last October, Swedish compressor and machinery maker Atlas Copco agreed to the sale of most of its U.S. equipment rental business to Ripplewood Holdings and Oak Hill Capital Management.
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