Reboot: Now United Rentals Buying Neff

18 August 2017

United Rentals, Inc. and Neff Corp., announced that they have entered into a definitive agreement under which United Rentals will acquire Neff for $25 per share in cash, representing a total purchase price of approximately $1.3 billion. The transaction is not apparently conditioned on financing. United Rentals said it expects to use a combination of cash, existing capacity under its ABL facility, and newly issued debt to fund the transaction and related expenses.

Immediately prior to entering into the definitive merger agreement with United Rentals, Neff terminated its previously announced merger agreement with H&E Equipment Services, Inc. In connection with this termination, United Rentals, Stamford, Conn., has paid H&E a termination fee of approximately $13.2 million on behalf of Neff.

That agreement, first announced in July, called for H&E will pay $21.07 in cash per share of Neff common stock, for a total enterprise value of approximately $1.2 billion. 

Interesting, the announcement of that agreement included a “go-shop” period which was scheduled to run through August 20, 2017, during which the special committee of Neff’s board of directors, with the assistance of its financial and legal advisors, could solicit alternative proposals to acquire Neff.  Apparently that came to pass.  There was no mention of a “go-shop” provision in the United rentals announcement.

Neff is one of the 10 largest U.S. equipment rental companies, with a presence in 14 states and a concentration in southern geographies. Based in Miami, Fla., Neff offers earthmoving, material handling, aerial and other equipment rental equipment. Neff has approximately 1200 Neff employees and 69 branches and serves end markets in the infrastructure, non-residential, energy, municipal and residential construction sectors.

As of June 30, 2017, Neff had approximately $867 million of fleet based on original equipment cost.

The boards of directors of United Rentals and Neff unanimously approved the agreement. Private investment funds managed by Wayzata Investment Partners LLC, which hold approximately 62.7% of the outstanding common shares of Neff, have executed a written consent to approve the transaction, thereby providing the required stockholder approval. The transaction is expected to close in the fourth quarter of 2017, subject to Hart-Scott-Rodino clearance and customary conditions.

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