New Zealand’s Commerce Commission has cleared the way for equipment rental company Hirepool to acquire Hirequip, which is in receivership, the New Zealand Business Journal reported this week. The Commerce Commission ruled that the two companies operate in different sectors and that there was no significant overlap between Hirepool and Hirequip in the heavy construction and earthmoving rental market.
The Commission said that a merged entity would be constrained by competition at a sub-regional level. The Commission also cited relatively low barriers to entry into that market as a consideration.
Hirepool, 75-percent owned by Australian private equity firm Next Capital, requested in October that the commission clear its potential acquisition. A purchase price agreement has not yet been negotiated, although Hirepool’s takeover of Hirequip would have to satisfy Hirequip’s secured creditor, Wastpac Banking Corp., which is owed NZ$117.8 million.
Hirepool has indicated that the acquisition of Hirequip would give it a significant presence in the heavy construction market. Hirequip’s parent companies — Pacific Equipment Solutions, PES Finance and Hire Equipment Group — were placed in receivership (bankruptcy) in July of 2012.