Australian investment group Seven Group Holdings has announced it will buy all remaining shares in rental company Coates Hire, taking 100% ownership of the company.
The deal, worth AUS$517 million (€346.29 million), takes Seven Group Holdings’ stake in the company from 47 to 100%, buying out the remaining 53%, which was previously owned by a combination of private equity business Carlyle Group, at 47%, with minority owners making up the remaining 6%.
Seven Group Holdings bought its initial 47% share of Coates Hire in 2008, and said it would fund its latest purchase with existing earnings and cash flow, including proceeds from the sale of its WesTrac operations in China in October - which is expected to be worth around AU$540 million (€363.15 million).
It said that full ownership of Coates Hire, which delivered a 5% increase in revenue during the 2016/17 financial year, would enhance Seven Group’s portfolio and increase its exposure to industrial services.
Ryan Stokes, managing director and CEO, Seven Group Holdings, said, “We have had a long history with the Coates Hire business and believe with the visible market opportunity associated with East Coast infrastructure activity, along with the current performance of the business and management team, the company is extremely well positioned to create value for all shareholders.
“The move to full ownership of Coates Hire will enhance Seven’s position as a leading operator of industrial services businesses, with a strong macroeconomic environment and a positive outlook providing the potential for significant opportunities to be realised.”
The transaction is subject to satisfactory waivers being obtained from Coates Hire’s existing lending syndicate.
Coates Hire is the largest rental company in Australia, with over 200 branches nationwide.