Sumitomo Corp. has increased its ownership stake in Sunstate Equipment, making the Japanese corporation the majority owner of the Phoenix-based equipment rental company, effective Dec. 31. The transaction gives Sumitomo an 80-percent ownership stake in Sunstate.
Sumitomo made its original investment in Sunstate in 2009 during a severe downturn based on its conviction that the industry was poised for long-term growth. Since the investment, Sumitomo has focused on strengthening its partnership with Sunstate’s management team while gaining a deeper understanding of the equipment rental industry. Sumitomo officials said it now believes it is an opportune time to further grow Sunstate’s business because of increased rental penetration.
“Following a strong performance by Sunstate Equipment in 2012, both partners believe the equipment rental industry is poised for solid growth in 2013 and beyond,” the company said in a statement. “While this investment gives Sumitomo Corp. a majority interest in the company, Mike Watts and the existing management team will continue to operate the business and remain in their current roles.”
The company went on to say that the increased investment enhances Sunstate Equipment’s financial strength and ability to execute its long-term business strategies. Watts added that the three-year partnership with Sumitomo Corp. has been an excellent working relationship and that both companies share similar core values and cultures.
Sumitomo currently operates construction equipment dealerships in North America with annual volume of about JPY 150 billion (about U.S. $1.7 billion). Sumitomo also owns SMS Rents in eastern Canada.
Sunstate Equipment is led by Mike Watts, chairman; Benno Jurgemeyer, CEO; and Chris Watts, president and chief operating officer. The company is No. 14 on the RER 100. To read more information about Sunstate, please click on: http://rermag.com/trends_analysis/interviews/turning-around-rental-equipment-0902/