Sunbelt Rentals to Acquires NationsRent Companies

Thu July 20, 2006 - National Edition
Construction Equipment Guide

Sunbelt Rentals Inc., a subsidiary of Ashtead Group plc, and NationsRent Companies Inc., jointly announced that Sunbelt will acquire NationsRent in a transaction valued at approximately $1.05 billion. Following the closing of the transaction, it is expected that the combined company will rank as the third largest U.S. equipment rental company by 2005 revenues, with 477 locations in 35 states, employing approximately 7,000 associates.

George Burnett, chief executive officer of Ashtead, said, “NationsRent is a high quality company which, like Sunbelt, has an attractive and significant exposure to the growing non-residential construction market in the United States. The merger of NationsRent with Sunbelt uniquely creates a chain of 477 outlets with minimal overlap and accelerates our ’clustering’ strategy that has delivered consistent profitable growth over the past few years.

“NationsRent and Sunbelt have similar rental fleets both in age and in mix, and through the combination of these businesses, we believe we will enjoy benefits of scale in both customer service and buying power. The acquisition represents the latest step in Ashtead’s development and provides the company with an excellent opportunity to create additional shareholder value.”

Jeff Putman, chief executive office of NationsRent, said, “This transaction with Sunbelt represents an excellent opportunity for our employees and stockholders. The NationsRent employees will be joining a company that is performing at the top of our industry with strong revenue and operating cash flow growth. With limited geographic overlap, this combination will allow NationsRent employees to continue to serve our customers and provide an opportunity for career growth in one of the largest, most successful companies in our industry. For the stockholders of NationsRent, the transaction will allow them to realize an attractive return generated by the growth of the company over the past three years.”

“NationsRent board of directors, after a careful review of the transaction, unanimously voted in favor of the merger. I sincerely appreciate the confidence our stockholders have shown in our management and employees over the past three years,” Putman added.

Chief Executive Officer and President of Sunbelt, Cliff Miller, said, “We are excited to announce the proposed merger of Sunbelt and NationsRent. This will bring together two well-known brands and two well-respected companies that share a very strong focus on customer satisfaction. It is fitting that the primary beneficiaries of this combination will be the customers of Sunbelt and NationsRent as well as employees who have worked so hard to build both organizations.”

“This transaction will immediately extend the reach of the combined companies to eight additional states. Since there are very few overlapping branch locations, there will be plenty of growth opportunities for branch network employees of both companies as the combined company works to serve its expanded customer base.

“The two companies also have very different specialty operations which are complementary rather than redundant, such as NationRent’s Lowe’s retail-based program and its expanding dealership network along with Sunbelt’s pump, power and scaffolding operations. By adding NationsRent’s relatively new rental fleet to Sunbelt’s already significant investment in fleet, the combined company will feature a rental fleet base of approximately $2.2 billion of original cost.”

Terms of Transaction

The aggregate consideration payable at closing for the outstanding shares of NationsRent common stock is $495 million in cash, less transaction expenses incurred by NationsRent. In addition to this cash consideration at closing, NationsRent common stockholders may receive additional payments from a $28 million escrow amount remaining after settlement of any indemnification claims, the remainder of a $5-million reserve account established to cover the costs of any disputed claims, and a “common stock deferred payment” of up to $89 million. The earliest date funds may begin to be released to stockholders from the escrow account will be six months following the closing date.

The common stock deferred payment is payable in full if Ashtead’s share price equals or exceeds 140 percent of an agreed upon “reference price” of 223.5 pence, adjusted for the dilutive effect of Ashtead’s proposed rights offering. Payments may be earned in installments of approximately $5 million for each percentage point of appreciation above the reference price between 122.2 and 140 percent. The period in which the common stock deferred payment could be paid will last until the third anniversary of the closing date of the merger, and payments, if any, would be made on a quarterly basis.

Each outstanding share of NationsRent preferred stock will entitle the holder to receive $1,000, the liquidation preference, for an aggregate of $72 million.

In addition, pursuant to the transaction, Sunbelt will assume all of NationsRent’s outstanding indebtedness.

The consummation of the merger is subject, among other things, to approval by the Ashtead shareholders, and the consummation of certain financing arrangements, including a rights offering. Other conditions to closing include the consummation of NationsRent bond tenders and consent solicitations and the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

Simultaneously with the execution of the merger agreement, a majority of the stockholders of NationsRent approved the merger.

The transaction is expected to close on approximately Aug. 31, 2006.

Tender Offers,

Consent Solicitations

In connection with the merger, NationsRent announced that it will commence on July 19, 2006 an offer to purchase for cash any and all of its outstanding 9 percent Senior Notes due May 1, 2015 in an aggregate principal amount of $150 million and 9 percent Senior Secured Notes due Oct. 15, 2010 in an aggregate principal amount of $250 million.

In connection with the offers, holders of the 2015 Notes are being solicited to provide consents to certain amendments to the indenture for the 2015 Notes that would eliminate most of the restrictive covenants and events of default contained in the indenture, and holders of the 2010 Notes are being solicited to provide consent to amend the satisfaction and discharge of the indenture for the 2010 Notes.

The consent solicitation will expire at 5:00 p.m., EST, on July 31, 2006 and the offer will expire at 5:00 p.m., EST, on Aug. 29, 2006 in each case unless extended by NationsRent.

Completion of the offers and consent solicitations is subject to the satisfaction of certain conditions, including, but not limited to, receipt of valid tenders and consents from at least a majority in principal amount of each series of outstanding Notes and the consummation of the merger and the other transactions contemplated by the merger agreement.

The total consideration for each $1,000 principal amount of Notes validly tendered and accepted for purchase will be calculated, in accordance with standard market practice, based upon a fixed spread of 50 basis points over the bid side yield on the 3.9 percent U.S. Treasury Note due May 15, 2010, in the case of the 2015 Notes, and the 4.3 percent U.S. Treasury Note due Oct. 31, 2007, in the case of the 2010 Notes.

The foregoing total consideration for the Notes includes a consent payment equal to $30 per $1,000 principal amount of Notes tendered. Holders must validly tender their Notes on or before the Consent Deadline in order to be eligible to receive the total consideration. Holders who validly tender their Notes after the Consent Deadline and before the expiration of the offer will only be eligible to receive an amount equal to the total consideration minus the consent payment.

Additionally, holders whose Notes are purchased pursuant to the offer will receive any accrued but unpaid interest up to, but not including, the payment date for the Notes.

About NationsRent

NationsRent is headquartered in Fort Lauderdale, FL, and is one of the largest full service equipment companies in the United States, operating 268 locations in 26 states. NationsRent specializes in rentals and also sells new and used equipment with related merchandise, parts and supplies, and provides maintenance and repair services. NationsRent offers construction equipment with a focus on customer service at affordable prices with locations in major metropolitan markets throughout the United States.

About Ashtead

Ashtead Group, based in the United Kingdom together with its U.S. subsidiary, Sunbelt Rentals, provides equipment rental services. The company is publicly traded on the London Stock Exchange.

About Sunbelt

Sunbelt Rentals, a subsidiary of Ashtead Group plc, is a large equipment rental company in the United States. Sunbelt is based in Charlotte, NC, and provides equipment rental solutions for the industrial, construction, and municipal markets from its network of 209 branches in 26 states. Its equipment fleet includes general construction and industrial equipment. It also has specialty businesses serving the pump, power, trench shoring and scaffold markets.

Today's top stories

Diversity Drives Wearables Technology in Construction

Officials Approve Billions of Construction Dollars for Projects

Crews Work to Stabilize U.S. 101 After Dangerous Collapse

Prinoth Unveils Next Generation Panther T14R Rotating Dumper

Takeuchi Officially Opens New Training Center With Ribbon-Cutting Event

Innovation Has No Gender: Volvo CE Inspiring Tomorrow's Female Engineers

VIDEO: Case to Make Wheel Loader Product, Technology Announcement in Live Virtual Event

Volvo Construction Equipment Adds Entry-Level Package for Compact Assist Intelligent Compaction System


ceg-logo ceg-logo ceg-logo ceg-logo ceg-logo