Loxam enters South America with investment in Brazil's Degraus

Loxam has acquired an initial 25% share of Brazilian rental company Degraus, which is one of the top five rental companies in Brazil with 20 locations and 450 employees. The deal entails a capital increase at Degraus, allowing it to strengthen its position in Brazil’s rental market.

Degraus, founded in 1987, is a general equipment rental company with a strong presence in the state of Sao Paulo, as well as the states of Rio de Janeiro, Recife, Salvador and Porto Alegre.

This will be Loxam’s first venture into markets outside of Europe, where it already operates in 13 countries. Its business is still dominated by France, which generated 80% of total group sales in 2014.

Izaac Costa, founder or Degraus as well as its majority shareholder, chairman and CEO, will remain as general manager of the company.

Brazil has been one of the world’s fastest growing rental markets in the world in recent years - exemplified by the expansion of companies including Mills Rental, Solaris and A Geradora - but the last 18 months has seen a marked slowdown in the economy with a knock-on impact on the rental market.

Gérard Déprez, chairman and CEO of Loxam, said the investment enabled it to enter “a country with significant growth prospects. Our business know-how as well as the financial resources provided through this investment will allow Degraus to pursue its development and to strengthen its market share”.

Mr Costa added that he was pleased to welcome Loxam as an investor; “We will bring our experience in the Brazilian equipment rental market to Loxam while we will benefit from the expertise and the strong reputation of the European leader in the equipment rental market. In addition, this transaction will provide our employees with interesting perspectives of evolution.”