MISSISSAUGA, Ontario — Stephenson's Rental Services last month announced that its acquisition of A1 Equipment Rental has been finalized. The final purchase price of CD $43.8 million was financed with available credit facilities.
A1 is the second largest independent rental company in the greater Toronto area, with locations in Toronto, Durham and Oakville, Ontario. A1 reported revenue of CD $16.6 million and adjusted EBITDA of $7.5 million in 2005.
“We have an integration team established and will move quickly to combine the A1 operations with the existing Stephenson's business,” said James McInnis, Stephenson's vice president and chief financial officer. “In the near term, we expect to realize rationalization savings at A1, given the overlap with Stephenson's existing infrastructure.”
“The addition of A1's modern rental fleet as we head into the busy summer construction period positions Stephenson's well to capture additional revenue from new and existing customers,” added Stephenson's president and CEO Willie Swisher. “With Stephenson's established hub-and-spoke distribution infrastructure, we expect to improve the utilization of A1's fleet, providing for incremental revenue opportunities.”
Stephenson's also announced that first-quarter 2006 revenue for the three months ended March 31, 2006, increased 9.3 percent to CD $10 million from the first quarter of 2005, primarily due to higher rental revenue generated by a larger rental fleet and price increases implemented in late 2005 and the current quarter.
Revenue from equipment rental represented approximately 76 percent of total revenue for the quarter ended March 31, 2006, as compared to 74 percent of total revenue for the same quarter in 2005.
EBITDA for three months ended March 31, 2006, decreased to CD $1.2 million from CD $1.4 million during the same quarter in 2005. This decline, despite an overall increase in revenue compared to 2005, is the result of a higher proportion of total revenue being derived from the sale of used equipment at a lower margin than 2005 and certain cost increases such as higher fuel and insurance costs in the first quarter of 2006 as compared to the same period in 2005.
Stephenson's, based in the Toronto suburb of Mississauga, Ontario, is No. 48 on the RER 100.
