IRN JANUARY 2014
39
RENTAL MANAGEMENT PRIVATE EQUITY
Private equity
wakes up again
In 2013 the equipment
rental industry saw an
increase in investments
by private equity firms in
rental companies. What
does this mean for the
industry, and how will the
future be different from the
past waves of acquisitions?
Jeff Eisenberg reports.
JEFF EISENBERG has spent 18 years in the
equipment and rental industry. He started and
led Genie Financial Services in Europe, providing
finance for large and small rental companies
all over the world. Since 2000 he has held
senior positions in a number of European rental
companies, as well as working with startups
and acquisitions. He now provides consulting
services to financial institutions, equipment
manufacturers and rental companies.
Tel: +44 7900 916933;
E-mail:
THE AUTHOR
I
n the boom times of the late 1990s and the up
to 2008, the equipment rental industry saw
an unprecedented amount of investment from
private equity firms. This included investments in
start-ups and very early stage companies as well as
expansion finance, and even consolidations.
The logic of a consolidation was that in a
fragmented industry with small players, achieving
larger size, ‘critical mass’, would make companies
more efficient. Larger market share would help ease
pressure on rental rates; a larger product selection
meant overheads would be spread; and larger
companies had access to cheaper finance, and lower
equipment prices from manufacturers.
Both the stock markets and private equity saw the
opportunity, and often private equity investment
was a stepping stone to stock markets, which paid
very high earnings multiples
In the late 1990s, when the US rental industry in
particular was consolidating for the first time, a
standard formula started to emerge for acquiring
rental companies.
¬
UK aerial platform rental company has seen inward
investment by three different private equity firms.
