Yahoo Finance United Rentals' (URI) Unit to Acquire WesternOne for $91.8M
United Rentals of Canada, Inc., a unit of United Rentals, Inc. URI, has inked a deal to acquire the assets of WesternOne Rentals & Sales LP, an equipment rental provider of aerial lifts and heat solutions in Western Canada. The acquisition will boost the company’s general rental and specialty offerings in key Canadian provinces.
The deal, which is expected to close before year-end, is valued at approximately $91.8 million (CA$120.0 million) in cash.
However, shares of United Rentals were down 1.9% on Monday.
Benefits of United Rentals
WesternOne primarily serves non-residential construction and industrial customers in Alberta, British Columbia and Manitoba. Its presence at 12 locations will expand United Rentals’ own range for construction and industrial customers. Also, the notable sports and entertainment vertical, and a comprehensive propane and diesel fuel service will allow the company to diversify its portfolio.
United Rentals Rides on Acquisitions
United Rentals, the largest equipment rental company, has been pursuing strategic acquisitions in order to expand its geographic borders and product portfolio.
On Sep 10, 2018, the company inked a deal to acquire BlueLine Rental, one of the top ten equipment rental companies in North America. The deal is likely to boost its capacity in many of the largest metropolitan areas in the country. The transaction is valued at approximately $2.1 billion and is anticipated to close by fourth-quarter 2018.
Additionally, in July 2018, the company announced the acquisition of BakerCorp International Holdings Inc. for $715 million. The deal will boost the specialty rental business in North America and enable it to foray into some European markets.
In fact, the two most important acquisitions made in 2017 — Neff Corporation and NES Rentals — boosted the quarterly results of the company. Project XL initiatives, prudent investments in fleet, accretive acquisitions and robust market demand also drove United Rentals’ growth.
However, higher freight and fuel costs, along with labor shortages pose concerns. Meanwhile, shares of United Rentals have underperformed its industry in the past six months. The company’s shares have declined 26.5% compared with the industry’s fall of 17.8% in the said period.
Zacks Rank & Other Stocks to Consider
Currently, United Rentals carries a Zacks Rank #2 (Buy).
Other top-ranked stocks from the same industry include Continental Building Products, Inc. CBPX, PGT Innovations, Inc. PGTI and Armstrong World Industries, Inc. AWI. While Continental Building sports a Zacks Rank #1 (Strong Buy), PGT Innovations and Armstrong World both carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Continental Building’s earnings for 2018 are expected to increase 52.6%.
PGT Innovations’ 2018 earnings are expected to grow 78.7%.
Armstrong World is expected to record 23.5% earnings growth in 2018.
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