Heavyweight Deal: United Rentals Buys Yak Access In A Billion-Dollar Move To Reinforce Its Specialty Business

Author: Shivani Kumaresan | March 04, 2024 09:48am

Equipment rental company United Rentals, Inc (NYSE:URI) has entered into a definitive agreement to acquire Yak Access, LLC, Yak Mat, LLC and New South Access & Environmental Solutions, LLC from Platinum Equity for approximately $1.1 billion in cash. 

Yak is a known player in the North American matting industry, with a fleet of about 600,000 hardwood, softwood, and composite mats. It provides surface protection across both construction and maintenance, repair and operations (MRO) applications. 

For the year ended December 31, 2023, Yak generated $171 million of adjusted EBITDA on $353 million of adjusted revenue across over 40 U.S. states.

The acquisition is expected to aid United Rentals’ Specialty business with scale in a large and growing segment. United Rentals expects to realize a $7 million benefit to adjusted EBITDA, equivalent to approximately 2% of Yak’s adjusted revenue for 2023, by the end of year two after closing from cost synergies.

The acquisition is expected to be immediately accretive to earnings per share (EPS) and free cash flow (FCF). United Rentals will use a combination of new debt financing and existing capacity under its ABL facility to fund the transaction and related expenses.

The purchase price represents a multiple of 6.4 times adjusted EBITDA for 2023, and an adjusted purchase multiple of 5.2 times, net of tax benefits and cost synergies.

“This newly created “Matting Solutions” business will create another adjacency for our company with scale in a large and growing market segment,” said United Rentals President and CEO Matthew Flannery.

The transaction is expected to be completed in the first quarter of 2024. United Rentals held $363 million in cash and equivalents as of December 31, 2023.

Price Action: URI shares closed higher by 1.06% at $700.59 on Friday.

Photo via Shutterstock

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