Equity Firm To Buy Volvo Rents
As part of its strategic effort to focus on the core business, the Volvo Group announced it has agreed to sell Volvo Rents to the U.S. private equity firm Platinum Equity for approximately $1.1 billion.
A prerequisite for completion of the transaction is that Platinum Equity is successful in a debt offering to be made to finance its acquisition. Volvo Construction Equipment (Volvo CE) will continue to sell products to Volvo Rents under the new ownership.
“We looked at different alternatives to grow Volvo Rents’ business and concluded that the best alternative is to sell the operation to another owner,” said Olof Persson, Volvo Group president and CEO. “Volvo Rents’ business does not have a sufficiently strong connection with the Group’s core operation to motivate continued ownership.”
The transaction is expected to be closed in the first quarter of 2014.
Volvo Rents, formed in 2001, offers rental of a broad range of machines for construction and industrial applications, including Volvo CE products. Volvo Rents has operations in the U.S., Canada and Puerto Rico and has about 2100 employees. All of Volvo Rents’ employees will remain with the company as it is sold, the company said.
In the first nine months of 2013, Volvo Rents had net sales of $475 million and recorded an operating loss of $7.19 million.
Platinum Equity is a California-based global investment firm with a specialized focus on business operations. The firm has significant experience investing in companies that serve the construction, commercial and industrial equipment rental market.