Portable accommodation giant Algeco Scotsman has acquired Speedy loss-making UK accommodation rental business for £34.9 million, including 14 leased depots.
The acquisition has been made by Algeco Scotsman's UK subsidiary, Elliott Group, which has considerably strengthened its already major share of the UK's portable accommodation rental business.
Speedy Space is one of the largest portable accommodation rental businesses in the UK, with revenues in its two most recent financial years of £40.6 million (to 31 March 2010) and £35.5 million (to 31 March 2011). It was also losing money for Speedy, with operating losses in 2010 and 2011 of £2.1 million and £4.5 million, respectively.
Speedy will use the proceeds to pay off debt. As part of the deal, Speedy and Elliott have signed a three year partnership under which they will each provide their products to each other's customers on an exclusive basis. During that period Speedy will also service and maintain the 1650 power generation units integrated into the accommodation units that it has sold to Elliott.
The acquisition is the latest in several that Algeco Scotsman has made. In March it acquired Lamar Space, a 700 unit accommodation rental business located in San Diego, California, and in February it bought RB Farquhar (Hires), a 4000 unit renter strong in Scotland and Northern England in the UK.
Speedy said the Space business had been facing "particularly challenging trading conditions...in recent years, where excess capacity has exerted significant downward price pressure, resulting in poor levels of profitability."
Steve Corcoran, chief executive of Speedy, said he was very pleased to be selling the loss-making operation and welcomed the partnership with Elliott; "By working as partners with Elliott, our customers can continue to benefit from an integrated service. We look forward to developing this partnership and we see significant opportunities from working together closely in the future."
The deal is expected to close on 30 April.