The equipment rental industry is going through a massive change in the ownership of its largest players. Of the ten largest companies in the 2006 RER 100 published in May, only three, United Rentals (#1), Home Depot (#5), and Sunstate Equipment (#10) have not announced any plans to merge, sell or make any other significant changes in their corporate structure.
This activity is a healthy sign that capital is again flowing to the industry after suffering through a prolonged downturn in the early 2000’s. As opposed to the consolidation craze that swept through the industry in the late 1990’s, these transactions are much more rational and based on solid business fundamentals.
How will the industry react to these changes at the top? Who will acquire RSC? How will this economic cycle play out?
The past several years have been very good to the rental industry. The next down cycle will not be as painful as was the downturn of 2000-2003, in my opinion, baring any calamitous world event that touches American soil.
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FocalPoint is an independent investment bank, specializing in mergers and acquisitions, private placements (both debt and equity), and financial restructurings. The firm’s primary focus is on middle-market companies with revenues between $10 million and $250 million in a diverse range of industries.