United Rentals Completes Acquisition of Yak Access

Rhea-AI Summary

United Rentals, Inc. (NYSE: URI) has completed the acquisition of Yak Access, , Yak Mat, , and New South Access & Environmental Solutions, for $1.1 billion in cash. Yak, a leader in the North American matting industry, generated $171 million of adjusted EBITDA on $353 million of adjusted revenue in 2023.

Insights

Market Research Analyst

The acquisition of Yak by United Rentals represents a strategic expansion into the matting industry, a sector that plays a critical role in supporting various infrastructure projects. The matting solutions are essential for site access and ground protection, thereby reducing environmental impact and enhancing worker safety. This move could potentially open new revenue streams for United Rentals and diversify its service offerings, which may appeal to a broader customer base.

From a market perspective, the integration of Yak's substantial fleet into United Rentals' existing portfolio could enhance the company's competitive edge, especially in the utility and midstream verticals where Yak has established a strong presence. The financial figures disclosed, with Yak generating $171 million of adjusted EBITDA on $353 million of adjusted revenue, indicate a healthy EBITDA margin that is indicative of operational efficiency and pricing power within its niche market.

Financial Analyst

The funding of the acquisition through a combination of newly issued senior unsecured notes and existing capacity under the ABL facility is noteworthy. This financing strategy suggests a balanced approach to capital management, aiming to preserve creditworthiness and liquidity. Investors should monitor the impact of this acquisition on United Rentals' leverage ratios and interest coverage, as these are key indicators of financial health and could influence the company's stock performance.

Additionally, the plan to update the 2024 financial outlook in the upcoming earnings release is an important consideration for investors. It will provide a clearer picture of the expected synergies and financial impact of the acquisition. The long-term value creation mentioned by CEO Matthew Flannery hinges on the successful integration of Yak's operations and the realization of anticipated synergies, which should be scrutinized once more detailed financials are available.

STAMFORD, Conn.--(BUSINESS WIRE)-- United Rentals, Inc. (NYSE: URI) (“United Rentals” or “the company”) today announced that it has completed its previously announced acquisition of Yak Access, LLC, Yak Mat, LLC and New South Access & Environmental Solutions, LLC (collectively, “Yak”) from Platinum Equity for approximately $1.1 billion in cash. The transaction and related expenses were funded through a combination of newly issued senior unsecured notes and existing capacity under the company’s ABL facility.

Yak is a leader in the North American matting industry with a fleet of approximately 600,000 hardwood, softwood, and composite mats providing surface protection across both construction and maintenance, repair and operations applications. Yak predominantly serves customers in the utility and midstream verticals. For the year ended December 31, 2023, Yak generated $171 million of adjusted EBITDA on $353 million of adjusted revenue across over 40 U.S. states.

Matthew Flannery, chief executive officer of United Rentals, said, “Today we are very excited to welcome Yak to the United Rentals family. This is an acquisition with both strong strategic and financial merits. Not only does it augment our growth capacity with the addition of a leading North American matting solutions provider but it also further differentiates our one-stop-shop value proposition to customers. Combined, this has proven to be a winning strategy for building long-term value for our investors.”

The company plans to update its 2024 financial outlook to reflect the combined operations when it releases financial results for the first quarter in April.

About United Rentals

United Rentals, Inc. is the largest equipment rental company in the world. The company has an integrated network of 1,504 rental locations in North America, 38 in Europe, 23 in Australia and 19 in New Zealand. In North America, the company operates in 49 states and every Canadian province. The company’s approximately 26,300 employees serve construction and industrial customers, utilities, municipalities, homeowners and others. The company offers approximately 4,800 classes of equipment for rent with a total original cost of $20.66 billion. United Rentals is a member of the Standard & Poor’s 500 Index, the Barron’s 400 Index and the Russell 3000 Index® and is headquartered in Stamford, Conn. Additional information about United Rentals is available at unitedrentals.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240315234303/en/

Elizabeth Grenfell

Vice President, Investor Relations

(203) 618-7125

investors@ur.com

Source: United Rentals, Inc.

FAQ

What companies did United Rentals acquire?

United Rentals acquired Yak Access, , Yak Mat, , and New South Access & Environmental Solutions,

How much did United Rentals pay for the acquisition?

United Rentals paid approximately $1.1 billion in cash for the acquisition.

What is Yak's specialty?

Yak is a leader in the North American matting industry, providing surface protection solutions with a fleet of approximately 600,000 mats.

Which sectors does Yak primarily serve?

Yak predominantly serves customers in the utility and midstream verticals.

What were Yak's financial performance in 2023?

Yak generated $171 million of adjusted EBITDA on $353 million of adjusted revenue in 2023.