McGrath RentCorp acquires modular space solutions company Vesta Modular
McGrath RentCorp, a business-to-business rental company in North America, has acquired modular space solutions company Vesta Modular from Kinderhook Industries in an all-cash transaction valued at approximately $400 million.
With the acquisition, McGrath RentCorp anticipates to increase its longer-term financial profile, mobile modular business footprint, reach to new customers, and proportion of longer-term rental revenue contracts.
McGrath RentCorp anticipates to realize $8 million of annual run-rate synergies by 2024 and $30 million of value from net operating losses.
The Southfield, Michigan, US-headquartered Vesta Modular offers temporary and permanent modular space solutions through two divisions, namely Modular Space Leasing and Modular Construction Services.
Joe Hanna — McGrath RentCorp President and CEO said: “Growing Mobile Modular is the strategic focus area for our Company, and the addition of Vesta’s portfolio accelerates our expansion of the business.
“We are now able to offer our customers access to an expanded product line across more geographies than ever before.
“We are confident we will be able to leverage our combined sales and operational resources by seamlessly integrating Vesta in order to grow the new, larger scaled McGrath modular business together.”
Modular Space Leasing owns and leases approximately 6,000 units to customers across a diverse range of end markets and applications while Modular Construction Services offers design, manufacturing, logistics, and installation of modular buildings.
Vesta Modular with more than 900 customers serves industrial, education, government, construction, municipalities, and retail sectors with branches in Houston, Atlanta, and Miami.
The final purchase price of Vesta Modular is said to be subject to customary adjustments.
Concurrently, McGrath RentCorp divested Adler Tank Rentals to Ironclad Environmental Solutions, a Kinderhook portfolio company, for a cash price of $265 million, subject to certain adjustments.
Founded in 1979, McGrath RentCorp offers modular solutions through its mobile modular and mobile modular portable storage businesses.