Less than a month after Coates Hire rejected a beefed-up offer from U.S.-based private equity group The Carlyle Group and Australian rental outfit National Hire, Coates accepted a stronger offer to acquire all of its shares for AU $6.59 cash per share — $6.06 per share in cash and a 53-cents-per-share special dividend. The total value of the transaction is AU $1.65 billion (about U.S. $1.48 billion), up from the AU $1.58 billion offer Coates rejected in early September.

National Hire and Carlyle said the deal placed about a AU$2.2 billion (about U.S. $1.97 billion) enterprise value on Coates.

According to Australian press reports, the leverage multiple for Coates is about five times earnings, short of the 7.5- to 9-times earnings deals that were common in the buyout market prior to the subprime mortgage crisis that began in mid-July.

The merger of Coates, Australia’s largest rental firm, and National Hire, about 20 percent of Coates’ size, creates a company with annual rental volume of AU $990 million (about U.S. $890 million), with EBITDA of more than AU $200 million. The buyers estimate synergies between the two companies will save more than AU $30 million.

National Hire will transfer its rental business into the merged entity, which will be known as the Ned Group, with Carlyle contributing $339 million in cash. Industrial business integration consultant Tony Dage will also join Ned Group to lead the integration of the two rental operations, which is expected to take 12 to 18 months to complete.

Carlyle has experience in the equipment rental industry through its 18 percent interest in Hertz, which includes Hertz Equipment Rental Corp.

Coates had put itself in play in May after approaches from several parties, but announced in August that the company was off the market after bids were insufficient. David Karpin, non-executive director of the Sydney-based Coates, said the board believed the company could have a strong future as a stand-alone company, given its market-leading position. With increased offers, the board reconsidered and finally approved the latest Carlyle/National bid.

Carlyle Australia managing director Simon Moore last week said that while international credit market conditions had become more difficult for borrowers, the Australian market was somewhat isolated from the negative impacts because of a strong domestic economy.