It's been a very interesting month in the rental industry. If you take a look at our news section, you'll read — and I'm sure many of you have already been following this in RER Reports, our weekly electronic newsletter, and other news sources — that RSC Rental's initial public offering fell short of expectations. The fact that its IPO, which raised $458.3 million at $22 per share, was short of expectations is an indication of how far the expectations regarding the equipment rental industry have come in the decade since United Rentals more or less introduced the equipment rental concept to “the Street.”
On the other hand, Neff Rental withdrew its application for an IPO after being acquired by Lightyear Capital for about $900 million, two years after Odyssey Investment Partners paid about $510 million for Neff. Obviously rental is still a pretty hot item in the world of private equity. In the same month, such diverse rental players as Stephenson's Rental Services in Toronto and Coast Crane in Seattle attracted private equity buyers, and, I would suspect, quite a few companies are taking a look at United Rentals' book.
Another interesting acquisition scenario will play out in the coming months as Ingersoll Rand explores strategic alternatives for its Bobcat unit. There was a lot of discussion about Bobcat's future at the recent Bauma Trade Fair in Munich, Germany (see our report on Bauma on page 141). At that time, before Ingersoll Rand made its announcement, the focus was on Volvo, which had just acquired IR's road paving division, and the hot question for speculation was “how long until Volvo goes after Bobcat?” At this point, we can only speculate about Volvo being a player for Bobcat, but I would assume Bobcat would attract the interest of quite a number of buyers, private equity and strategic as well.
Bobcat is one of those rare brands where the manufacturer's name becomes almost synonymous with the machine itself. How many end users walk into rental centers and say, “I need to rent a Bobcat,” not even knowing exactly what a skid-steer loader is? Of course Bobcat makes more than skid steers, where its market share and brand recognition is extremely high. My sense is a lot of major manufacturers will at least take a look at Bobcat.
And on the subject of major manufacturers with strong market share, JLG Industries last month named Craig Paylor president and I can't think of anybody more qualified. The 29-year company veteran has worked his way up through the ranks and has been referred to as “Mr. JLG” by so many. I can't imagine walking into the JLG booth at any trade show and not seeing Paylor, and you don't find many people at any company who care more about their companies and products. He is a smart man who knows how to listen and how to be a team player and I salute the management of Oshkosh Corp. for recognizing his value. Like most of you, I'm on the outside looking in, but it seems as though last year's surprising acquisition of JLG by Oshkosh Corp. has resulted in a good fit.
For those of you who aren't aware of it, you can get up-to-date news on the rental industry any time online at www.rerreports.com, where you can also sign up to have the latest news-of-the-week sent to you via e-mail first thing every Monday morning.
Many of our regular readers will also notice something a little different in the format of this month's RER.
As I assume you have noticed, this month's issue of RER also contains the Buyers' Guide in a departure from our usual format. I hope you'll keep it handy for quick reference as you always did with our Buyers' Guide.
In addition, this month's cover story is about how to do a business plan. Most of you reading this magazine already have established rental businesses, but if you are considering any kind of business expansion, the development of a solid, detailed business plan is essential. I was struck how in this month's story, written by our managing editor Brandey Smith, a number of interviewees pointed out how often rental companies lack a detailed plan. Even if you don't need to develop the kind of business plan an entrepreneur starting a rental business might, the same basic principles of planning can be utilized at any time. Check out the article on page 22.
