Emeco Holdings, an international equipment rental company based in Perth, Australia, last week filed a prospectus with the Australian Securities and Investments Commission for an initial public offering to raise between $1 billion and $1.13 billion Australian, ($735 million to $830 million U.S.) The IPO would rank as one of the largest of the year so far in Australia, and place Emeco among its top 200 listed companies.
Emeco plans to issue more than 450 million shares at a price between AU$2.10 and $2.50 per share. Most of the capital will be used to reduce Emeco’s debt to about AU$250 million, leaving it room to borrow more money to fund growth.
Emeco managing director Laurie Freedman said the company is looking at acquisitions in new and existing markets in Australia, North America, Chile, India and Africa. Emeco has offices in Australia, Indonesia, Canada, Japan, the United States and the Netherlands, with about 70 percent of total earnings coming from Australia.
Rental revenue provides about 91 percent of the company’s earnings, with the rest coming from sales, parts and maintenance.
Analysts expect strong demand for Emeco’s shares. The retail offer will open July 3 and close July 21, with the institutional offer opening July 25 and closing the day after. Final share price and allocations will be announced July 27.
Emeco has grown significantly in recent years. The company was acquired by Darr Equipment (since acquired by Holt Caterpillar) in 1996, before selling it to GS Private Equity (now Archer Capital) and Pacific Equity Partners for about $500 million in October 2004. It raised additional funds in 2005 by issuing exchangeable notes, which were listed on the Australian Stock Exchange.
Emeco made a significant acquisition in August 2005, when it purchased Edmonton, Alberta-based River Valley Equipment Rentals & Sales in the high-growth Alberta market, complementing existing Emeco businesses in Atlanta and Houston. In December 2005, Emeco acquired Andy’s Earthmoving, a large independent rental business in Victoria, Australia. Earlier this month, Emeco acquired Bevans, another Australian earthmoving equipment sales and rental company.
With North American operations based in Houston, Emeco is No. 76 on the RER 100.
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