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United Rentals expands in pump rental with National Pump acquisition
pumpindustry ANALYST
ISSN 1359-6128 March 2014
www.pumpindustryanalyst.com
United Rentals expands in pump rental with National Pump acquisition
U
nited Rentals Inc is to buy the North American pump rental company National Pump. The US$780 million purchase price is comprised of US$765 million in cash and US$15 million in stock. National Pump supplies 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 says that it 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.” In the last 12 months, the business generated revenue of US$211 million and adjusted EBITDA of US$103 million on a US$250 million fleet. For further information, visit www.unitedrentals.com and www.npcrents.com
COMMENT In acquiring National Pump, United Rentals will become a major player in the pump rental business. And with plans to double the size of its pump business within five years, United Rentals is set to capture an even bigger share of the growing pump rental market. ■
Contents Company Profile Crane
5
DESMI
6
Company Watch Alfa Laval
7
CECO Environmental
7
GLV
8
KSB
8
Sulzer
9
Xylem
9
Diary
15
Dividends
13
Exchange Rates
14
Financial Calendar
14
In Brief
12
Market Prospects New Product Developments
2–4 14
News United Rentals expands in pump rental with National Pump acquisition 1 Hertz to spin off equipment rental business
1
Kirloskar Brothers acquires SyncroFlo
12
Pentair forms Abu Dhabi JV
12
Hertz to spin off equipment rental business
Hayward Tyler signs new banking facility with RBS 12
T
Grundfos expands in Pakistan
12
New segment structure for Dover
13
National Oilwell Varco changes reporting segments
13
Xylem joins US Water partnership
13
he Hertz Corp is to separate its equipment and car rental businesses into two independent, publicly traded companies. Hertz will receive net cash proceeds of approximately US$2.5 billion from a Hertz Equipment Rental Corp (HERC) spin-off. The proceeds will be used to pay down Hertz debt and support a newly approved US$1 billion share repurchase program. The separation is planned to be in the form of a tax-free spin-off to Hertz shareholders and is expected to close by early 2015. HERC rents a broad range of equipment
including pumps. The business had annual revenues of more than US$1.5 billion in 2013, with 38% of its 2013 revenues derived from the construction market, 26% from industrial, 36% from other markets including oil and gas, and from other specialty niche markets, such as pump and power, government services, and the entertainment industry. HERC has 335 branches in the US, Canada, France, Spain, China and Saudi Arabia, as well as international franchisees. For further information, visit www.hertzequip.com and www.hertz.com
Flowserve adds to Coimbatore pump facility 16 Grundfos 2013 turnover up 2.9%
16
Weir Minerals extends European service network
16
Orders & Contracts
10
People & Appointments
11
Stock Watch
15
ISSN 1359-6128/14 © 2014 Elsevier Ltd. All rights reserved. This journal and the individual contributions contained in it are protected under copyright by Elsevier Ltd, and the following terms and conditions apply to their use: Photocopying Single photocopies of single articles may be made for personal use as allowed by national copyright laws. Permission of the publisher and payment of a fee is required for all other photocopying, including multiple or systematic copying, copying for advertising or promotional purposes, resale, and all forms of document delivery. Special rates are available for educational institutions that wish to make photocopies for non-profit educational classroom use.
ISSN 1359-6128 March 2014
www.pumpindustryanalyst.com
United Rentals expands in pump rental with National Pump acquisition
U
nited Rentals Inc is to buy the North American pump rental company National Pump. The US$780 million purchase price is comprised of US$765 million in cash and US$15 million in stock. National Pump supplies 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 says that it 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.” In the last 12 months, the business generated revenue of US$211 million and adjusted EBITDA of US$103 million on a US$250 million fleet. For further information, visit www.unitedrentals.com and www.npcrents.com
COMMENT In acquiring National Pump, United Rentals will become a major player in the pump rental business. And with plans to double the size of its pump business within five years, United Rentals is set to capture an even bigger share of the growing pump rental market. ■
Contents Company Profile Crane
5
DESMI
6
Company Watch Alfa Laval
7
CECO Environmental
7
GLV
8
KSB
8
Sulzer
9
Xylem
9
Diary
15
Dividends
13
Exchange Rates
14
Financial Calendar
14
In Brief
12
Market Prospects New Product Developments
2–4 14
News United Rentals expands in pump rental with National Pump acquisition 1 Hertz to spin off equipment rental business
1
Kirloskar Brothers acquires SyncroFlo
12
Pentair forms Abu Dhabi JV
12
Hertz to spin off equipment rental business
Hayward Tyler signs new banking facility with RBS 12
T
Grundfos expands in Pakistan
12
New segment structure for Dover
13
National Oilwell Varco changes reporting segments
13
Xylem joins US Water partnership
13
he Hertz Corp is to separate its equipment and car rental businesses into two independent, publicly traded companies. Hertz will receive net cash proceeds of approximately US$2.5 billion from a Hertz Equipment Rental Corp (HERC) spin-off. The proceeds will be used to pay down Hertz debt and support a newly approved US$1 billion share repurchase program. The separation is planned to be in the form of a tax-free spin-off to Hertz shareholders and is expected to close by early 2015. HERC rents a broad range of equipment
including pumps. The business had annual revenues of more than US$1.5 billion in 2013, with 38% of its 2013 revenues derived from the construction market, 26% from industrial, 36% from other markets including oil and gas, and from other specialty niche markets, such as pump and power, government services, and the entertainment industry. HERC has 335 branches in the US, Canada, France, Spain, China and Saudi Arabia, as well as international franchisees. For further information, visit www.hertzequip.com and www.hertz.com
Flowserve adds to Coimbatore pump facility 16 Grundfos 2013 turnover up 2.9%
16
Weir Minerals extends European service network
16
Orders & Contracts
10
People & Appointments
11
Stock Watch
15
ISSN 1359-6128/14 © 2014 Elsevier Ltd. All rights reserved. This journal and the individual contributions contained in it are protected under copyright by Elsevier Ltd, and the following terms and conditions apply to their use: Photocopying Single photocopies of single articles may be made for personal use as allowed by national copyright laws. Permission of the publisher and payment of a fee is required for all other photocopying, including multiple or systematic copying, copying for advertising or promotional purposes, resale, and all forms of document delivery. Special rates are available for educational institutions that wish to make photocopies for non-profit educational classroom use.