United Rentals, Inc. (NYSE:URI) announced today that it has entered into a definitive asset purchase agreement to acquire National Pump, the second largest specialty pump rental company in North America.
Under the terms of the agreement, United Rentals will also acquire GulfCo, a two branch general rental business also based in Texas. The combined purchase price for the assets is approximately $780 million. The Board of Directors of United Rentals and the partners of National Pump unanimously approved the proposed transaction.
With National Pump, United Rentals enters the pump rental segment, one of the largest and highest growth specialty markets. The company has been executing its strategy of expanding its specialty businesses, and this acquisition provides another significant product line with attractive margins and returns. In addition, National Pump will offer significant cross-selling opportunities with both United Rentals’ and National Pump’s customer bases.
Michael Kneeland, President and Chief Executive Officer of United Rentals, said, “This transaction is an important step in our strategy to create a company that delivers strong financial returns through the cycle. We have been executing against a plan to strengthen and diversify our business, as demonstrated by our 18 specialty cold starts in 2013 and 13 planned for 2014. National Pump provides an attractive new specialty offering which increases our penetration in growing end markets and advances over time our financial goals of delivering strong free cash flow and improved returns.”
Kneeland continued, “Loddie Naymola and his team have done an outstanding job of building National Pump into the number two pump rental player and the leading provider to the oil and gas end market. We are pleased that key members of the senior management team are joining United Rentals and remain committed to growing the business. We see tremendous opportunities for National Pump and are eager to apply our standards for operational excellence, financial resources, and scale advantages to help National Pump realize its full potential.”