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Encouraging Trends on the RER 100

May 1, 2016
While there seems to be plenty of jobs going on right now, with non-residential, residential – especially multi-family – and other kinds of construction doing pretty well, there are definitely different views on just what phase of the upswing we are in.

While preparing the RER 100 for this month’s issue one of the concerns expressed by a number of people was the sense, similar to those pre-recession years about a decade ago, that some of the markets are getting crowded with a lot of equipment. One investor clearly stated, some years back, that’s what a recession is, in terms of the rental industry: too much equipment chasing too few jobs.

While there seems to be plenty of jobs going on right now, with non-residential, residential – especially multi-family – and other kinds of construction doing pretty well, there are definitely different views on just what phase of the upswing we are in. Some think it’s the early stages, some think we might already be in the latter stages. The uneasy consensus is that there is still a fair bit of positive growth ahead.

I just had a conversation with one of the RER 100 executives during which we both commented that while conditions would appear to be propitious for some consolidation, there hasn’t been a lot of M&A activity in the current cycle. That very morning, shortly before this issue went to press, the topic of consolidation blew through the roof with the acquisition of two of the largest crane rental companies in North America, Maxim Crane and AmQuip Crane Rental by Apollo Global Management (see story on page 12). Both companies are listed separately on the RER 100 since the deal has yet to be finalized, and you can find them at No. 6 and No. 17, respectively, accounting for $750 million in rental volume. As a combined company, they would be No. 4 on this year’s RER 100, and the largest crane rental company in North America, if not the world. It brings to mind some of the larger deals in the past, such as Sunbelt Rentals’ acquisition of NationsRent and of course United Rentals’ purchase of RSC.

So we’ll see if more consolidation is on the horizon.

Overall I see some encouraging trends. The industry’s leaders seem very optimistic. Looking at some of the larger companies, United Rentals and Sunbelt are on firm ground. Larry Silber has brought a fresh wind of leadership to HERC, which will soon spin off into an independent public company. Those of you who knew Silber in his career with Ingersoll-Rand know that he’s a creative and energetic force who is not afraid to think outside the box, and I predict that with independence from Hertz Global we’ll see interesting initiatives from what will soon be known as Herc Rentals.

BlueLine Rental also has new leadership and Asterios Satrazemis is also a forward-looking and dynamic thinker. He made the point that Blueline didn’t really have an identity other than being thought of as the former Volvo Rents. Satrazemis and his new team have set out to develop that identity and you’ll be hearing more about it.

Aggreko, H&E Equipment Services, Neff, NES and Sunstate are all posting good numbers. Ahern Rentals continues to grow and has added former JLG leader Craig Paylor to its top management team.

You don’t have to be one of the biggest to be setting the bar high. Star Rentals, Skyworks, Illini Hi-Reach and Able Equipment all have new headquarters and interesting plans and initiatives. Bottom Line Equipment is breaking ground on a new facility and posting impressive growth. Stephenson’s Rental Services and Battlefield Equipment Rentals are expanding despite Canada’s economic slump. Imperial Crane, PDQ Rentals, Cloverdale and several others had big jumps.  

Mustang Rental Services and Yancey Rents are adding fleets and locations; Acme Lift is adding inventory and impressive managers; Hugg & Haul launched a new division; Southeastern will add a central location for paving customers; Cooper Equipment tripled in size with a huge acquisition of SMS Rents; and there’s more.

I can’t list them all here. A lot of good things happened in the past year so read through the RER 100 section and you’ll see. And there are several impressive newcomers to the list.

But I’m making it sound a lot easier than it was. There are some tough times going on in a lot of regions and we’ve got some real survivors out there. We had an oil boom going on a few years back and those rental companies in the middle of those regions fleeted up only to see the bottom fall out pretty quickly. And many companies had to make some major adjustments and they were not easy.

So I hope you enjoy this issue of the RER 100. Next year’s story is already being written in jobsites all over North America!