COSTA MESA, Calif - Contractor supply house White Cap Industries, whose concrete equipment rental business is ranked No. 67 on the RER 100, has agreed to merge with a group that includes a private investment bank and White Cap management.

The transaction, valued at about $240 million, involves a recapitalization of the company by an ownership group consisting of privately held investment bank Leonard Green & Partners; Greg Grosch, founder and top officer of White Cap; and other management of the company.

Under terms of the deal, White Cap shareholders will be paid $16.50 per share, a 43 percent premium to the stock's closing price on the eve of the announcement.

"The transaction brings significant value to our shareholders and provides White Cap with increased financial strength to continue our leadership in business-to-business retailing to professional contractors," Grosch said.

The merger is expected to be completed in the fourth quarter of 1999, pending shareholder and regulatory approval.

Los Angeles-based Leonard Green & Partners manages more than $1.7 billion of private equity capital, according to the investment bank.