Summary
United Rentals, Inc. (URI) has announced a significant divestiture through its wholly owned subsidiary, United Rentals (North America), Inc. (URNA). URNA has entered into a Stock Purchase Agreement to sell its entire traffic control business, operating under United Rentals Highway Technologies, Inc. and United Rentals Highway Technologies, L.P., to HTS Acquisition, Inc. This transaction is valued at $85 million in cash, subject to customary adjustments for working capital and other factors. The sale is anticipated to conclude in the first quarter of 2007 and is not contingent on regulatory approvals or financing for the buyer. This strategic move indicates United Rentals' focus on streamlining its operations and potentially reallocating capital. The company will provide certain indemnification for specific pre-existing liabilities and will offer transition services for accounting, IT, and training for a period of three to six months post-closing. Additionally, United Rentals will maintain certain letters of credit to support surety bonds related to the divested business until project completion or the end of 2008. The original equipment cost of the assets being sold is also approximately $85 million, aligning with the transaction's cash consideration.
Key Highlights
- 1United Rentals is selling its traffic control business (United Rentals Highway Technologies, Inc. and L.P.) to HTS Acquisition, Inc.
- 2The sale price is $85 million in cash, subject to working capital and other adjustments.
- 3The transaction is expected to close in the first quarter of 2007.
- 4The sale is not dependent on regulatory approvals or buyer financing.
- 5United Rentals will provide indemnification for certain liabilities and transition services for 3-6 months post-closing.
- 6The original equipment cost of the assets being sold is approximately $85 million.
- 7This divestiture suggests a strategic refocusing of United Rentals' business operations.