United Rentals
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| Type | Public (NYSE: URI) |
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| Founded | 1997 |
| Headquarters | Greenwich, Connecticut |
| Key people | Michael J. Kneeland, CEO |
| Products | Construction & Industrial Rentals and Sales |
| Website | http://www.ur.com |
Founded in 1997 by Bradley S. Jacobs and seven others, United Rentals, Inc. is the largest equipment rental company in the world, with more than 600 rental locations throughout the United States and Canada. Their diverse customer base includes construction and industrial companies, utilities, municipalities, and homeowners.
United Rentals is headed up by Michael J. Kneeland (President & CEO) and William B. Plummer (EVP & CFO). Total annual revenue in 2008 was $3.3 billion, including $2.5 billion in equipment rental revenue. United Rentals also holds a 9 percent share of construction and industrial equipment rentals in North America. Having the largest fleet of rental equipment in the world, United Rentals employs more than 8,600 employees, servicing over 300 metropolitan areas, 49 states, and ten Canadian provinces.
The company has four main divisions: General Rentals, Aerial, HVAC/Pump & Power, and Trench Safety. While the general rental branches are the most prolific and yielding for the company, the other divisions are increasingly a larger portion of United's revenue.
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[edit] Extreme Makeover: Home Edition partnership
United Rentals is the rental equipment provider for the television show, Extreme Makeover: Home Edition, offering construction equipment rentals to assist volunteers in building a house within seven days. The Emmy-award-winning show relies on support in the form of crew workers, volunteers and training from United Rentals’ branches across the country, as well as over 2,000 pieces of donated rental equipment.
[edit] Business operations
United Rentals serves its customers through the operation of two business segments:
General Rentals: United Rentals offers construction and industrial equipment rentals, as well as homeowner equipment and tool rentals. This also includes aerial equipment, and United Rentals offers North America’s largest rental fleet of aerial work platforms.
Trench Safety, Pump and Power: This segment includes specialty equipment rentals for underground construction, temporary power, climate control and training services. Primary customers for this include infrastructure contractors, industrial companies, municipalities and the military. United Rentals provides customers with quality rental equipment and training to ensure safety.
[edit] History
[edit] SEC investigation
In 2004, the United States Securities and Exchange Commission announced it was conducting an inquiry into the accounting records of the company. While exonerated from any misdoings, United Rentals did have to recalculate its earnings for the fiscal years, 2003-2004.
[edit] Abramoff scandal
In 2008, former Senate staffer Trevor Blackann pleaded guilty and United Rentals lobbyists James Hirni and Todd Boulanger were named for defrauding the government on behalf of United Rentals in 2003. Boulanger and Hirni gave Blackann and a House staffer an all-expenses-paid trip to Game 1 of the 2003 World Series in exchange for amendments to the Federal Highway Bill that favored United Rentals. At the time, Hirni and Boulanger were lobbyists in Jack Abramoff's group at Greenberg Traurig.[1]
[edit] Business outlook and transformation
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In general, recent U.S.contractors have increasingly relied on rentals of equipment rather than owning or leasing, as had been the case in the past. United Rentals, resultantly, is poised to benefit tremendously from this shift given its current market share. Nonetheless, URI seeks to improve its overall business model and, subsequently, has undertaken new initiatives to achieve this goal:
On December 26, 2006 United Rentals announced the sale of their Highway Technology division to HTS Acquisition, Inc., an entity newly-formed by affiliates of private equity investors Wynnchurch Capital Partners and Oak Hill Special Opportunities Fund, L.P.
On April 10, 2007 United Rentals announced that the board of directors would be exploring strategic alternatives for the entity, including a potential sale of the company. It was also announced that Wayland Hicks, CEO, would be retiring in Summer 2007. Michael Kneeland is now the acting CEO.
On July 23, 2007 United Rentals announced a definitive agreement to sell the company to Cerberus Capital Management in a transaction valued at approximately $6.6 billion, including the assumption of approximately $2.6 billion in debt obligations. The board of directors of United Rentals approved the merger agreement and had recommended the approval of the transaction by United Rentals' stockholders. In anticipation of the merger, United Rentals embarked on a series of restructuring moves which included department closures and layoffs.
On November 15, 2007 United Rentals announced that Cerberus Capital Management, L.P. informed it that Cerberus was not prepared to proceed with the purchase of United Rentals on the terms set forth in its merger agreement, dated July 22, 2007. The company noted that Cerberus had specifically confirmed that there had not been a material adverse change at United Rentals. On December 21, 2007 a Delaware Chancery Court ruling denied United Rentals attempt to force Cerberus to follow through on the takeover bid. However, the court did order Cerberus to pay a $100 million termination fee.
On December 16, 2011, United Rentals and RSC Holdings, Inc. announced that they had entered into a definitive merger agreement, under which United Rentals will acquire RSC in a cash-and-stock transaction.[2]
URI rents over 2,900 different classes of equipment and holds about 10% of the equipment rental industry by revenue,[3] the biggest share of any company in its segment.[4]
[edit] References
- ^ Zachary Roth (November 24, 2008). "Abramoff Lobbyists Wanted Measure Attached To Young's Transportation Bill". TPM Muckraker. http://tpmmuckraker.talkingpointsmemo.com/2008/11/abramoff_lobbyists_wanted_meas.php.
- ^ "United Rentals to acquire RSC Holdings" [1]
- ^ United Rentals 2007 10-K, Item 1, pg. 1 via Wikinvest
- ^ Calculated by dividing URI 2007 revenue by total 2007 industry revenue, United Rentals 2007 10-K, Item 1, pg. 1
[edit] External links
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