Exhibit 99.1
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FOR IMMEDIATE RELEASE
UNITED RENTALS TO MERGE WITH U.S. RENTALS, CREATING LARGEST EQUIPMENT RENTAL
COMPANY IN NORTH AMERICA
Transaction Expected to be Significantly Accretive to United Rentals' Earnings
GREENWICH, CT, and MODESTO, CA, JUNE 16, 1998 - United Rentals, Inc. (NYSE: URI)
and U.S. Rentals, Inc. (NYSE: USR) today jointly announced that their respective
boards of directors have unanimously approved a definitive agreement to merge
the two companies, creating the largest equipment rental company in North
America, with 296 rental locations in 33 states, Canada and Mexico. Under the
terms of the agreement, U.S. Rentals shareholders will receive 0.9625 shares of
United Rentals common stock for each U.S. Rentals share in a tax-free pooling of
interests. The merger, which is subject to Hart-Scott-Rodino clearance,
shareholder approvals and other customary conditions, is expected to close
before the end of September 1998.
United Rentals Chairman and Chief Executive Officer Bradley Jacobs said,
"We are uniting two industry leaders to create the largest and most dynamic
equipment rental company in North America. This merger strengthens our combined
operations and is significantly accretive to earnings. It provides numerous
opportunities to achieve economies of scale and other synergies, including the
ability to share equipment between United Rentals and U.S. Rentals branches."
Mr. Jacobs added, "U.S. Rentals has long been recognized for its
outstanding management team and strong asset base. The combined company will
have the management depth, geographic scope, and diverse equipment fleet to
efficiently meet the needs of an expanding range of customers. With this
merger, we will create a world-class organization, which will be well prepared
to grow in a rapid and highly disciplined manner."
The new company, which will operate under the name United Rentals, Inc.,
will have an aggregate equity market capitalization of approximately $2.1
billion, and an annual revenue run rate of approximately $1.4 billion, including
acquisitions currently under non-binding letters of intent. The combined
company's present customer base includes over 500,000 customers, comprised of
construction industry participants, industrial and commercial companies,
homeowners and other
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individuals.
U.S. Rentals Chairman Richard Colburn said, "We are very excited about
joining forces with United Rentals to capitalize on the many growth
opportunities in the equipment rental industry. There are substantial operating
benefits available to the larger companies in this industry, including greater
purchasing power with equipment suppliers, the opportunity to achieve increased
utilization of the rental fleet by sharing equipment between branches, and the
ability to sell used equipment more efficiently through a nationwide sales
force."
Mr. Jacobs will continue to serve as chairman and chief executive officer
following the merger. Mr. Colburn will join the United Rentals board of
directors as chairman emeritus. Wayland Hicks, chief operating officer of
United Rentals, will continue to serve in that position for the new company, and
will take on the added role of vice chairman. The members of U.S. Rentals'
management team will play key roles in the new company. Bill Berry, president
and chief executive officer of U.S Rentals, will become president of the
combined company, with responsibility for day-to-day operations, and will report
directly to Mr. Hicks. In addition, Mr. Berry will join the board of directors
of United Rentals. John Milne, vice chairman and chief acquisition officer of
United Rentals, and Michael Nolan, chief financial officer of United Rentals,
will continue to serve in these positions in the combined company. John
McKinney, chief financial officer for U.S. Rentals, will serve as vice
president, finance for the new company. U.S. Rentals will also nominate two
additional directors to the United Rentals board.
Separately, United Rentals also announced today that it completed the
acquisitions of 10 equipment rental companies, with aggregate 1997 revenues of
approximately $121 million. This latest round of acquisitions adds 47 branches
located in nine states and Canada. The companies acquired consist of Power
Rental Co., Inc. (headquartered in Oregon), Grand Valley Equipment Co., Inc.
(Michigan), Gaedke Equipment Co. (Texas), Reitzel Rental Ltd. (Ontario), Select
Equipment Ltd. (Ontario), Yankee Equipment Corp. (Connecticut), Dealers Service
Co. (New Jersey), Sky King Equipment Ltd. (Ontario), Madison Equipment Sales &
Rentals, Inc. (Alabama) and Georgian Sales & Construction Rentals Ltd.
(Ontario).
John Milne, vice chairman and chief acquisition officer, said, "After
closing the ten acquisitions announced today, United Rentals has non-binding
letters of intent to acquire 24 rental companies, with 130 locations and
aggregate annual revenues of approximately $342 million. This industry remains
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highly fragmented, with the top 10 companies having less than a 15% share of the
North American market. As a result, we continue to see many opportunities to
acquire quality equipment rental companies at attractive valuations."
Goldman, Sachs & Co. served as financial advisor to United Rentals, and
Donaldson, Lufkin & Jenrette Securities Corporation served as financial advisor
to U.S. Rentals.
United Rentals, Inc. is a leading equipment rental company serving the
construction industry, industrial and commercial concerns, homeowners and other
individuals, through its present network of 170 locations in 24 states and
Canada. The company offers for rent a broad range of equipment, including
backhoes, forklifts, aerial manlifts, generators, pumps and hand tools. The
company was founded in September 1997 by the former core management team of
United Waste Systems, Inc., a solid waste management company that was acquired
by USA Waste Services, Inc. last August in a transaction valued at approximately
$2.5 billion. United Rentals entered the equipment rental industry by acquiring
six established rental companies in October 1997, completed its initial public
offering in December 1997 and a follow-on equity offering in March 1998, and
completed a senior subordinated notes offering in May 1998. Since its inception,
the company has acquired 50 rental companies across the United States and
Canada. United Rentals was recently ranked as the sixth largest equipment rental
company in North America by RER Magazine, a leading industry publication.
U.S. Rentals, which has been in the equipment rental business since 1957,
is the second largest equipment rental company in North America. The company
currently operates 126 rental locations in 22 states and serves a diverse base
of commercial and residential construction, industrial, and homeowner customers.
U.S. Rentals completed its initial public offering in February 1997 and
completed a senior notes offering in April 1998. The company's growth has been
primarily driven by strong same-store sales increases resulting from ongoing
investments in expanding and modernizing the rental fleet, cold starts of new
rental locations and acquisitions.
The matters discussed in this news release include certain forward-looking
statements that involve specific risks and uncertainties, which could cause
actual results to differ materially from those forward-looking statements. These
include, but are not limited to, general economic conditions, the impact of
interest rate fluctuations, seasonal rental patterns principally due to the
effects of weather, increased competition, the timing and cost of acquisitions,
the availability of additional capital to fund future acquisitions,
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and other risks detailed in each company's recent filings with the Securities
and Exchange Commission. The companies make no commitment to disclose any
revisions to forward-looking statements, or any facts, events or circumstances
after the date hereof that may bear upon forward-looking statements.
Contact: Contact:
Robert Miner John McKinney
United Rentals, Inc. U.S. Rentals, Inc.
(203) 622-3131, Ext. 118 (209) 544-9636
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