GREENWICH, Conn. — United Rentals recently announced it signed a definitive agreement to sell its traffic control business to HTS Acquisition Inc., an entity newly formed by affiliates of private equity investors Wynnchurch Capital Partners and Oak Hill Special Opportunities Fund, L.P.
Under the terms of the agreement, HTS Acquisition will pay United Rentals $85 million in cash, subject to certain working capital and other adjustments. The transaction, expected to close in the first quarter of 2007, is subject to customary closing conditions, but not conditioned on regulatory approvals or purchaser financing.
United Rentals' traffic control business represents one of the company's three financial reporting segments. In 2005, full-year traffic control revenues were $270 million, about 8 percent of the company's total revenues. By comparison, the company's primary business segment, general rentals, reported $3.11 billion in revenue in 2005, 87 percent of total revenue.
“The sale of our traffic control business supports our strategy of focusing our resources on those businesses where we have the greatest opportunities for financial growth and market leadership,” said Wayland Hicks, CEO of Greenwich, Conn.-based United Rentals. “While our traffic control operations showed steady improvement throughout most of 2006, our general rentals and trench safety, pump and power segments are more consistent with our core strengths and vision.”
As a result of the definitive agreement, United Rentals expects a fourth-quarter 2006 loss on sale in the range of 19 cents to 24 cents per diluted share. This loss on sale, as well as prior period and full year 2006 results for the traffic control segment, will be reflected in discontinued operations when the company reports its fourth quarter and full year 2006 results. United does not expect the divestiture to have a material impact on 2007 results.
Affiliated with Wynnchurch Capital Partners is Paul Ingersoll, one of the original founders and former chief financial officer of NES Rentals.
United Rentals is No. 1 on the RER 100.
