A rental fleet operator has entered into an agreement to acquire a Kansas City trucking business for nearly $1.5 billion.
On December 3, Nesco Holdings, Inc. announced that the company had agreed to purchase Custom Truck One Source (CTOS) for $1.475 billion.
Both Nesco and CTOS provide specialized truck and heavy equipment services, including rentals.
According to the FMCSA’s SAFER website, CTOS employs 157 drivers.
According to Nesco, “The combination will create a leading, one-stop-shop provider of specialty rental equipment serving highly attractive and growing infrastructure end-markets, including transmission and distribution (“T&D”), the 5G revolution build-out and critical rail and other national infrastructure initiatives. With complementary business lines, customer bases and capabilities, the combination is expected to yield significant benefits from increased scale, breadth of product and service offerings and expanded geographic coverage. Following closing, the combined company will have a more attractive financial profile with significantly reduced leverage and enhanced liquidity providing flexibility to address anticipated demand in the large and growing addressable market in which it operates.”
As part of the transaction, Platinum Equity, LLC will invest $850 million into Nesco in exchange for newly issued common stock at a price of $5.00 per share, giving Platinum Equity a majority interest.
“We are excited to bring together our complementary companies to provide a full range of solutions to our customers,” said Fred Ross, Chief Executive Officer of CTOS. “I want to thank our dedicated employees for all that they do each day. Looking ahead, as a combined company, we will be very well positioned to capitalize on a broad range of growth opportunities and better serve our customers’ specialty rental equipment needs on a national basis. We look forward to working together with the Nesco team to realize substantial synergies that will create meaningful value for all our stakeholders.”