Summary
United Rentals, Inc. (URI) filed an 8-K on October 31, 2018, announcing the successful completion of its acquisition of Vander Holding Corporation for an aggregate purchase price of $2.1 billion. This strategic acquisition is expected to be financed, in part, through a new $1 billion senior secured term loan facility. The company also announced updates to its 2018 guidance reflecting the consummation of the merger. Investors should note that the credit agreement for the new loan facility does not contain financial covenants, which could be a point of interest regarding future financial flexibility.
Key Highlights
- 1Completion of the acquisition of Vander Holding Corporation for $2.1 billion.
- 2Secured a new $1 billion senior secured term loan facility to help finance the acquisition and refinance existing debt.
- 3The new term loan facility matures on October 31, 2025.
- 4Interest rates on the term loan facility are based on LIBOR or a base rate plus a specified margin.
- 5The credit agreement for the new loan facility contains covenants that restrict certain corporate actions but notably does not include financial covenants.
- 6Proceeds from the term loan facility are also being used to pay related fees and expenses.
- 7URI has purchased representations and warranties insurance for the acquisition.