Williams Scotsman and Algeco to merge

19 March 2008

The world's two biggest portable accommodation and space rental companies, Europe's Algeco and Williams Scotsman in the US, are to merge. Algeco's owner, Ristretto, has offered US$2,2 billion (€1,59 billion) in cash for the US company.

The deal, which Williams Scotsman's board has recommended to its shareholders, will see Scotsman's 118000 unit rental fleet in North America, Mexico and Spain merged with Algeco's European fleet of 175000 units, which includes Elliotthire in the UK.

The combined business will operate in 16 countries and employ over 4600 people, with an overlap only in Spain. Total revenues of the two businesses will be around €868 million and it will be by far the biggest accommodation renter in the world and one of the very few global equipment rental businesses.

Total rental revenues - stripping out Williams Scotsman's non - rental activities-will be around €636 million, which would make it the world's sixth-largest equipment rental business.

Although Algeco's parent is acquiring Williams Scotsman, it is the US company that will take the lead in running the combined operation. Scotsman's chief executive officer, Gerry Holthaus, will retain his current position and also become CEO and chairman of Algeco's parent company Ristretto.

Bruno Roqueplo will remain chief executive officer of Algeco, reporting to Mr Holthaus. Williams Scotsman's headquarters in Baltimore, Maryland, will become the global headquarters for Algeco. Both companies will continue to operate under their existing brands.

Mr Holthaus would not comment on which company initiated the transaction, although on the US location of the head office and his own leadership position, he commented; “The buyer believed that the experience of Williams Scotsman's management team happened to be an attractive element in the purchase.”

Mr Holthaus told IRN that the big two benefits of the deal were the opportunity to offer international customers a global service, and the sharing of expertise between the two companies; “Here at Williams Scotsman we are presented with opportunities to help companies internationally, and we can't do it. We know the interest is there, we just haven't been able to do it That's a benefit that we can realize sooner rather than later.

“We've created a very powerful international platform. It gives us opportunities for cross-fertilization in terms of products and practices. What are they doing in Europe that we could do here, and vice versa.”

Mr Holthaus added that there were particular opportunities for the two companies to expand their product ranges; “For example, in the UK, Elliott does toilet hire, which we don't do in the US. That's an example of a product available that we could decide to do in North America.”

He also said there was a “very substantial future growth opportunity” in renting storage containers; “It's not currently our leading product.”

Further acquisitions are likely to play a part in future growth; “Williams Scotsman historically has acquired a little over 30 companies in the last 10 years. We have been acquisitive”, said Mr Holthaus, “Algeco too has been reasonably acquisitive. Acquisitions generally will be part of our growth strategy. I don't see that changing.”

Algeco's Mr Roqueplo said, “Williams Scotsman's management team, under Gerry Holthaus, has created the market leader in North America, and we recognise their proven track record for delivering quality customer service, compelling products and outstanding operational execution. We look forward to leveraging the reputation of both companies for innovation and execution to take advantage of a growing and diversifying market for our services.”

The transaction is expected to close in the fourth quarter of 2007.

Williams Scotsman has rental locations in the US, Canada and Spain. Algeco operates in France, UK, Spain, Germany, Portugal, Italy, Belgium, Poland, Czech, Romania, Finland, Slovakia and Luxembourg.

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