Diamond Rental recently completed a management-led buyout replacing its first set of private equity investors with a new investor, the Prudential Capital Group.
PCP invested mezzanine debt and preferred equity in Diamond Rental, concurrently completing senior financing, consisting of a revolving credit facility and term loan, to achieve direct one-stop financing in support of Diamond Rental’s re-capitalization. With many available options, Diamond management selected Prudential because of a positive rapport between the principals and the ability to structure a transaction that would allow management to increase its ownership in the company.
Prudential, for its part, was attracted to Diamond Rental because of the company’s dominant market share in Utah, the relatively high barriers to entry for competitors, the attractive unit economics of the rental business and Diamond’s strong, experienced management team.
The company was acquired from a group of existing investors, led by Housatonic Partners and Peterson Partners.
Prudential Capital Partners and Prudential Capital II are $619 million and $775 million middle-market mezzanine funds, respectively, with the capability to invest preferred and common equity alongside sponsored equity where such co-investment is warranted. Both funds are sponsored by Prudential Capital Group, the largest manager of private corporate fixed-income securities in the United States, with more than $40 billion of senior and mezzanine debt investments in nearly 1,000 companies.
Diamond Rental, No. 74 on the RER 100, is based in Salt Lake City and has 16 branches in Utah and one in Idaho.