Neff Rental Acquires Sacramento Rental Company

June 1, 2006
MIAMI Neff Rental last month acquired Roseville, Calif.-based Valley Rents & Ready Mix, Valley officials said. Terms of the transaction were not disclosed.

MIAMI — Neff Rental last month acquired Roseville, Calif.-based Valley Rents & Ready Mix, Valley officials said. Terms of the transaction were not disclosed.

Valley has been a fixture in the Sacramento, Calif., rental market since the company was founded in 1967, and in 2005 was named one of Sacramento's 50 fastest-growing businesses by the Sacramento Business Journal. It has a branch in nearby Elk Grove, Calif.

With the acquisition, Neff increases its branch operations in the Sacramento area to three and total number of stores nationwide to 66 in 16 states. For Neff, the Valley purchase is its first major acquisition since Odyssey Partners acquired control of Neff with a major re-capitalization in June 2005.

Valley's owners, Don Bates, Tony Pugh and Don Greene will continue their employment with Neff Rental.

“It was a very difficult decision to sell the company we acquired in 2001, but we are confident that Neff can take the operation to the next level, and we're looking forward to help them grow this business,” said Bates. “The deal is a great fit for the employees and customers of Valley.”

Hageman, Stansberry & Associates, based in Cameron Park, Calif., and Arlington, Texas, facilitated the transaction and managed it on behalf of Valley Rents & Ready Mix. HS&A is a mergers and acquisitions firm that specializes strictly in the equipment rental and special event rental industry.

Neff also announced a 9.4-percent increase in revenues to $76.5 million for the fourth quarter of 2005, compared to $69.9 million for the same period in 2004. Income from operations for the fourth quarter increased 104.3 percent to $17.6 million, compared with $8.6 million for 2004's fourth quarter, while net income jumped from $5.0 million to $5.6 million. Net income for the period reflects the impact of higher interest expense because of increased borrowings to fund Neff's re-capitalization, as well as higher interest rates.

Rental revenue increased 24.4 percent for the period to $63.9 million, while same-store rental revenues jumped 25.2 percent. Rental rates soared 9.8 percent in the fourth quarter, year over year, while dollar utilization hiked 6.3 percentage points to 53.7 percent. Adjusted EBITDA jumped 47.2 percent.

For the year ended Dec. 31, 2005, Neff reported a 12.9 percent revenue increase to $279.6 million, up from $247.7 million for 2004. Rental revenue increased 19.1 percent to $229.8 million, same-store rental revenues increased 20.4 percent year over year, while rental rates jumped about 11.1 percent. Dollar utilization increased by 6.4 percentage points to 51.2 percent. Adjusted EBITDA increased 45.5 percent to $106.1 million.

Based in Miami, Neff Rental is No. 9 on the RER 100.