Charlotte, N.C.-based Sunbelt Rentals last week announced that it acquired Northridge Equipment Co. Northridge was previously owned and operated by the Groff family, and has served the rental market in central and southern California for more than 50 years.
Northridge was one of the largest remaining family-owned rental businesses in the country, reporting total revenues of $38 million for the year ended Sept. 30, 2005. Northridge enjoyed pretax profit of $6.2 million in the year through September. It is currently listed No. 39 on the RER 100.
“It was a very difficult decision to sell the company that my parents started, but the fit with Sunbelt was a good one and the timing was right,” said Howard Groff, president of Northridge.
Sunbelt will continue operating the five acquired rental branches, located in Northridge, Palmdale, Lompoc, Bakersfield and Fresno. This acquisition adds significantly to Sunbelt’s California market coverage, as these locations serve a population of more than 13 million in three of the top 65 metropolitan areas in the country. Sunbelt now operates 10 branches in central and southern California.
“Our California team is strongly focused on our customers – providing the service and range of equipment they want on every project,” said Cliff Miller, Sunbelt’s president and CEO. “Our existing branches have all added substantially to their rental fleets this year. Acquiring these well-established Northridge locations now lets us serve a wider area, with more availability, faster delivery, and an even higher level of customer satisfaction.”
Mike Groff, general manager of Northridge, will remain with the company for a transition period. “My family and I are pleased with the transaction and are going to focus on other business interests,” said Mike Groff. “We feel Sunbelt will continue to be a leader in our markets; the sky is the limit.”
Arlington, Texas, and Cameron Park, Calif.-based Hageman, Stansberry & Associates represented Northridge in the transaction.
The Northridge acquisition follows Sunbelt’s recent acquisitions in Indiana, Florida, Tennessee, Southern California and Las Vegas, and recent greenfield openings in Miami, Phoenix, Houston and Maryland. Sunbelt paid $69.6 million for Northridge, and has invested about $100 million in acquisitions so far this year, according to George Burnett, chief executive of parent company Ashtead Group plc.
These new locations, combined with strong same-store sales growth, have helped Sunbelt’s operating profits increase 51 percent to $38.6 million for the first quarter ending July 31, 2005, according to results released previously by Ashtead . In 2004, Sunbelt Rentals’ revenue increased 14.7 percent, while the RER 100’s top 10 (including Sunbelt) increased 8.9 percent.
“We’re obviously pleased with these market share gains, and as we continue to grow our business, we’ll consider additional infill acquisitions such as Northridge, but emphasize organic growth,” Miller said.
In addition to being a major presence in the Southern California construction market, Northridge has long been known as one of the leading players in the lucrative niche of renting equipment for television and motion picture production in the region. Sunbelt Rentals, No. 4 on the RER 100, now has 13 locations in California.
