18 October, 2005
Sunbelt Acquires Five Rental Stores
Significantly strengthens presence in central and southern California
Ashtead Group plc, the equipment rental group serving the US and UK construction, industrial and homeowner market, announces that its US subsidiary, Sunbelt Rentals, has acquired Northridge Equipment Services Inc (“Northridge”) from the Groff family for a total consideration of $69.6 million (£39.7 million).
Northridge operates five rental stores in southern and central California based in Northridge (northern Los Angeles), Bakersfield, Lompoc, Fresno and Palmdale. Its market coverage includes a geographic area with a population of over 13 million (c37% of California’s total population) containing three of the top 65 metropolitan areas in the US. In the year to 30 September 2005 Northridge reported total revenues of $38.3 million, EBITDA of $12.9 million, EBITA of $6.4 million and profit before tax of $6.2 million. The book value of its total assets at that date was $38.6 million and the business has been acquired debt free. The acquisition consideration was financed through the Group’s existing credit facilities. Excluding certain one time costs and gains which will not be incurred in future, Northridge’s adjusted EBITDA for the year ended 30 September 2005 was $14.8 million and the ratio of the consideration to adjusted EBITDA was 4.7 times.
This acquisition brings the number of stores operated by Sunbelt in the central and southern California markets to 10. Since the start of our financial year on 1 May 2005, Sunbelt has now acquired a total of 15 stores whose annual revenues exceed $64 million and has opened a further three new stores on a greenfield basis.
George Burnett, Ashtead’s chief executive commented:
“Northridge is a strong business with five stores which are well established in their local markets. Its acquisition significantly strengthens Sunbelt’s presence in central and southern California and continues our strategy of focusing on the development of significant clusters of conveniently located stores in attractive markets. We have invested $100 million so far this year on acquisitions that extend Sunbelt's presence in attractive US markets.”