NEFF acquired by UNITED RENTALS

United Rentals agreed on 16 August 2017 to acquire Neff Corporation at $25 per share in cash, an enterprise value of $1.3B. Both boards approved the deal unanimously, and private investment funds managed by Wayzata Investment Partners, holding about 62.7% of Neff’s shares, signed a written consent that provided the required shareholder approval. Completion was expected in the fourth quarter of 2017, subject to Hart-Scott-Rodino clearance. Immediately before signing with United Rentals, Neff terminated a previously announced merger agreement with H&E Equipment Services, and United Rentals paid H&E a termination fee of about $13.2 million on Neff’s behalf. Neff was expected to generate revenue of and an adjusted EBITDA of for 2017, an EBITDA margin of , giving an EV/EBITDA multiple of net of synergies, or 4.5 times including the net present value of acquired tax benefits, estimated at $220 million. The company had around 1,170 employees, 69 branches, more than 15,500 customers and a fleet with an original equipment cost of about $867 million. The purchase added scale in fast-growing southern markets and strengthened earthmoving in United Rentals’ fleet mix, while Neff’s position in infrastructure fitted the buyer’s vertical growth strategy and opened cross-selling opportunities for its specialty equipment. United Rentals targeted around $35 million of cost synergies by the end of the second year and $15 million of cross-selling benefits by the end of the third, and expected the deal to add immediately to cash earnings per share and free cash flow, with return on invested capital exceeding its cost of capital within 18 months.