MIAMI - Neff Corp. has signed a definitive agreement to sell Neff Machinery, its construction dealership unit, to Nortrax, a newly formed venture between Deere and Credit Suisse Group.
The $91 million deal, expected to close this month, clears the way for a possible sale of Neff Rental, No. 6 on the RER 100. Since Neff began exploring a sale in April, several suitors had balked at buying the sales and rental operations as a single package, according to sources.
Neff Machinery, with seven Florida locations, had 1998 revenue of about $103 million.
"Neff Corp. will now be a pure rental company. In this regard, we are continuing to evaluate other strategic alternatives including a sale or merger," said CEO Kevin Fitzgerald.
Neff, which had 1998 rental revenue of $179 million, currently has 96 locations in 18 states. Neff said it will use the proceeds from the sale to repay about $321 million of consolidated debt, with about $121 million of revolving debt outstanding. In October, Neff agreed to sell its 65 percent interest in Sullair Argentina for $42.5 million.
In addition to Neff Machinery, Nortrax is expected to consolidate and manage additional Deere construction equipment dealers.
"The Nortrax organization will benefit from economies of scale as its family of dealerships grows," said Bill Van Sant, who has been named CEO of the venture. "The company's consolidation activities will allow us to more efficiently deliver products and services."
Deere, which owns a minority interest in Nortrax, sells construction equipment through more than 460 locations in North America.
