The US$780 million purchase price is comprised of US$765 million in cash and US$15 million in stock.
National Pump is a leading supplier of pumps for energy and petrochemical customers. Upstream oil and gas customers represent about 50% of National Pump’s revenue. The business has 35 branches, including four in western Canada.
Under the terms of the agreement, United Rentals is acquiring the assets of National Pump & Compressor Ltd, Canadian Pump and Compressor Ltd, GulfCo Industrial Equipment LP and LD Services LLC.
The acquisition strengthens United Rentals’ specialty rental business and supports the company’s strategy of expanding higher margin and higher return assets. United Rentals plans to double the size of its pump business within five years.
Michael Kneeland, president and CEO of United Rentals, said: “This transaction is an important step in our strategy to create a company that delivers strong financial returns through the cycle. We have been executing against a plan to strengthen and diversify our business, as demonstrated by our 18 specialty cold starts in 2013 and 13 planned for 2014. National Pump provides an attractive new specialty offering which increases our penetration in growing end markets and advances over time our financial goals of delivering strong free cash flow and improved returns.”
National Pump was set up in 2007 and has grown at over 50% annually from 2010 through to 2013. In the last 12 months, the business generated revenue of US$211 million and adjusted EBITDA of US$103 million on a fleet with an original equipment cost of US$215 million.