LONDON — Davis Service Group through its tool rental subsidiary HSS Hire Shops agreed to purchase RentX, No. 18 on the RER 100 and one of the original consolidators, for approximately $47 million.

“RentX will significantly enhance our presence in what is a fast growing but fragmented market. We expect the business to be earnings enhancing in 2002, cash generative from 2003 onwards …”
— John Ivey, CEO Davis Service Group

In addition, the company will pay for the net of acquired cash balances and completion of accounts as of July 2 and contribute an additional $2.5 million payable over a minimum of four years dependent on cash flow.

In mid-April, RER reported HSS and RentX parent company Saint Gobain of France visited Denver-based RentX to investigate the possibility of acquiring the 74-store rental chain although neither company at the time confirmed the report. RentX, which operates in 13 states, generated an estimated $52.0 million in rental revenue in 2000. The company reported total revenues of $63 million and operating profits of $4.2 million. Its net tangible assets are estimated at about $34 million.

“We have already successfully tested the HSS tool hire concept in Florida and started a roll out program,” said Davis Service Group CEO John Ivey. “RentX will significantly enhance our presence in what is a fast growing but fragmented market. We expect the business to be earnings enhancing in 2002, cash generative from 2003 onwards, and to make a significant contribution to group profits in the years that follow.”

Ivey added the company will invest about $25 million in rental equipment, facilities and systems over the next two years.

HSS operates more than 400 rental stores in Great Britain and 14 in south Florida. It began its U.S. operations in 1996 with a single store in Fort Lauderdale, Fla.

News Tips?

Call Michael, Peter or Candy
800/543-4116