United Rentals, Inc. · NYSE:URI
United Rentals — Merger or Acquisition (December 2011)
20 slides from United Rentals's merger presentation, December 2011
Slide 1: United Rentals to Acquire RSC Holdings
United Rentals to Acquire RSC Holdings Investor Presentation DECEMBER 2011
Slide 2: Introductory Information
Introductory Information Cautionary Statement Regarding Forward-Looking Statements This document contains “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and in the Private Securities Litigation Reform Act of 1995, known as the PSLRA
Slide 3: On Today's Call
On Today’s Call PRESIDENT AND CHIEF EXECUTIVE OFFICER, UNITED RENTALS MICHAEL KNEELAND Michael Kneeland was appointed President and Chief Executive Officer of United Rentals, and a Director of the Company, in 2008. He had previously served as Interim Chief Executive Officer since 2007. Mr. Kneeland
Slide 4: Agenda
Agenda 1. Key Transaction Terms 2. Combination Overview 3. Strategic & Financial Rationale 4. Financial Profile 5. Q4 Market Update 6. Q&A 4
Slide 5: Introduction
Introduction Solid recent performance ─ Robust October and November performance for both companies ─ 2012 outlook is positive Optimal transaction timing ─ Strong market growth expected over next 5 years, surpassing 2007 peak in 2014* ─ Rental penetration increasing Strategic and financially co
Slide 6: Key Transaction Terms
Key Transaction Terms United Rentals is acquiring RSC for $18 per share or a total enterprise value of $4.2 billion including the STRUCTURE assumption of $2.3 billion of net debt Merger consideration will consist of 60% cash and 40% stock OFFER Each outstanding share of RSC common stock will b
Slide 7: Combination Overview
Combination Overview Combined OEC of $7.0 billion A LEADING LTM revenue of $3.9 billion(1) NORTH AMERICAN Best in class management team EQUIPMENT RENTAL COMPANY Largest branch network in industry EXPECTED TO BE SUBSTANTIAL ACCRETIVE TO CASH Strong regional positions CASH SYNERGY EPS IN FIR
Slide 8: Meets Strategic Criteria
Meets Strategic Criteria Fits with United Rentals’ long-term strategy to build stronger relationships with the most attractive customer groups Corporate cultures are closely aligned ROIC of the transaction expected to be greater than 10% by second full year 8
Slide 9: Strategic & Financial Rationale
Strategic & Financial Rationale Industry poised for growth / ability to manage through all cycles Balanced customer mix – Industrial / Construction Positioned to serve key large customers / national accounts Integration / branch optimization expertise Substantial cost savings / revenue synergy oppor
Slide 10: Industry poised for growth / ability to manage through all cycles
Strategic & Financial Rationale: Industry poised for growth / ability to manage through all cycles RENTAL INDUSTRY POISED FOR GROWTH* Combined Company well-positioned to take advantage of growth trends, while Equipment rental industry revenue (US$ Million, US & Canada) reducing cyclical volatility
Slide 11: Balanced customer mix
Strategic & Financial Rationale: Balanced customer mix UNITED STANDALONE(1) COMBINED COMPANY(1) RSC STANDALONE(1) RESULT = DIVERSIFIED END-MARKET Increased penetration of industrial accounts Improved ability to manage through all cycles Growth outpacing general rental sector Surpass previously a
Slide 12: Better ability to serve key large customers / national accounts
Strategic & Financial Rationale: Better ability to serve key large customers / national accounts Focus on attractive large customers ─ Longer, more stable rental periods Enhanced opportunity to become supplier ─ Lower transaction costs of choice for key customer accounts ─ Higher revenue per tra
Slide 13: Cultures and strategies are aligned
Strategic & Financial Rationale: Cultures and strategies are aligned CULTURE United Rentals and RSC share a similar business culture with a commitment to exceptional customer service Both companies possess a deep bench of leaders across the organization ACCOUNT FOCUS Shared focus on key accoun
Slide 14: Significant integration and branch optimization experience
Strategic & Financial Rationale: Significant integration and branch optimization experience PLAN IN PLACE TO FACILITATE STRONG TRACK RECORD OF SMOOTH INTEGRATION BRANCH OPTIMIZATION OPTIMIZATION EXPERIENCE: OPERATING PRINCIPLES: Success in consolidating branches and View through customer’s eyes reta
Slide 15: Substantial cost savings / revenue synergy opportunities
Strategic & Financial Rationale: Substantial cost savings / revenue synergy opportunities COST SAVINGS Potential $200 million+ annual run-rate cost savings OPPORTUNITIES ─ 2/3 expected to be achievable within the first 12 months ─ Represents 5% of pro-forma combined LTM revenue, before synergies
Slide 16: Capital Structure Supports Combination
Capital Structure Supports Combination Accretive to Cash EPS in the first full year after closing ACCRETION Double–digit accretive to Cash EPS by Year 2 Strong pro-forma balance sheet BALANCE SHEET Liquidity of approximately $700 million at the time of closing 4.5x Total Debt/EBITDA (inclu
Slide 17: Q4 2011 Update – United Rentals
Q4 2011 Update – United Rentals OCTOBER 2011 NOVEMBER 2011 QTD AVERAGE TIME UTILIZATION 74.5% 71.5% 73.0% RENTAL REVENUE GROWTH 17.6% 17.5% 17.5% RATE GROWTH YoY 6.6% 6.9% 6.5% Sequential -0.2% 1.0% 0.8% United Rentals consolidated 20 branches in Q4 2011 17
Slide 18: Q4 2011 Update – RSC
Q4 2011 Update – RSC OCTOBER 2011 NOVEMBER 2011 QTD AVERAGE TIME UTILIZATION 75.2% 70.9% 73.1% RENTAL REVENUE GROWTH 22.8% 31.5% 26.9% RATE GROWTH YoY 4.9% 6.7% 5.8% Sequential 1.2% 2.0% 3.2% Strong trends expected to continue in 2012 18
Slide 19: Summary
Summary ENTERING TRANSACTION FROM A POSITION OF STRENGTH ─ Rental industry poised for growth ─ Ability to manage through cyclical trends ─ Record of integration and branch optimization experience CREATING FINANCIAL VALUE ─ Expected to be accretive to cash earnings in the full first year ─ Substantia
Slide 20: Q&A
Q&A Michael Kneeland , United Rentals Erik Olsson, RSC Bill Plummer, United Rentals 20
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