US Giant, United Rentals, Acquires Orange Hire
In a deal by PE firm, Arcadia Capital, Orange Hire, based in Wetherill Park, NSW, is set to be snapped up by the World’s largest hire company, United Rentals.
United Rentals, which reported $5.25 billion in revenue for the March quarter, eclipses Australia’s entire hire market with a $US47 billion market capitalisation.
One of the largest dry hire operators on the east coast with seven branches, Orange Hire offers earthmoving equipment, barriers, fencing, and traffic control equipment across NSW, Victoria and Queensland. Significantly, the acquisition does not register as a step into the Elevating Work platform sector, which is one of the major components of United Rental in the US; leading to speculation that United are still on the hunt for a Powered Access business to compliment their earthmoving and site services categories.
In an article in the Australian Financial Review, private equity has reaped solid returns from equipment hire businesses over the years, thanks to hard-asset backing from fleets, line of sight on receivables from locked-in contracts, and tailwinds from construction and infrastructure activity.
As reported in the AFR in February, 1300TempFence has commenced a sale process via PwC with $50 million EBITDA guidance. Also simmering in the background is Singapore’s Tat Hong Holdings’ sale of its local business, Tutt Bryant Group. Also in the sector, Pacific Equity Partners owns Altus Traffic, while Roc Partners owns Kiwi player Hirepool.
Orange Hire had EBITDA of $18 million with around 87 employees when Arcadia came on broad in 2020. The earnings are understood to have increased to over $30million at the time of exiting.
