In an unusual dynamic of an equipment rental software company acquiring two equipment rental firms, Texada Software has entered into non-binding agreements to acquire the operating assets of Rolls Scaffold & Equipment, a four-location company based in Ventura, Calif., and DixEquip, a Houston-based dealership.
Texada, based in Guelph, Ontario, Canada, is spending $10.7 million to acquire Rolls in two separate transactions. First is the acquisition of rental fleet and other operating business assets, excluding scaffolding assets which will be retained by Rolls, from Rolls for cash and assumed liabilities totaling about $1.1 million. Second will be the acquisition of rental fleet from an existing lender, which will be providing term financing of about $9.6 million in conjunction with the acquisition.
The company is spending about $800,000 to acquire DixEquip.
Texada expects the Rolls acquisition to be completed by the end of the month, and the DixEquip acquisition later this year.
“These transactions mark a very significant milestone for Texada,” said Willie Swisher, CEO. “The board of directors mandated that we seek out the best strategic transactions for Texada to generate additional shareholder value and secure Texada’s future, and we believe the SoCal and DixEquip acquisitions represent a compelling platform to successfully achieve this goal. The vertical integration of Texada into the equipment rental and dealership space will be an added benefit for all the company’s stakeholders, including our existing customer base and valued employees.”
Texada also announced a non-brokered private placement of up to 40 million common shares at 10 cents each to raise $4 million to help finance the purchases.
Brian Spilak, Texada president, added “we have established clear strategic boundaries between the software business unit and future corporately owned equipment operations, ensuring our current and future customers can rely on the trusted brand we have built at Texada.”
Rolls Scaffold & Equipment is a major player in the southern California aerial and scaffolding rental markets. In addition to its Ventura headquarters, the company has branches in Long Beach, Irwindale, Riverside and San Diego. Rolls, founded in 1958, is No. 88 on the RER 100.
DixEquip represents manufacturers such as New Holland, LiuGong, Mustang, Yanmar, Harlo and others.