United Rentals to Acquire Yak Access for $1.1 Billion

United Rentals, Inc. (NYSE: URI) (“United Rentals” or “the company”) today announced that it has entered into a definitive agreement to acquire Yak Access, LLC, Yak Mat, LLC and New South Access & Environmental Solutions, LLC (collectively, “Yak”) from Platinum Equity (“Platinum”) for approximately $1.1 billion in cash. The transaction is expected to close in the first quarter of 2024, subject to limited contractual conditions.

Yak is a leader in the North American matting industry with a fleet of approximately 600,000 hardwood, softwood, and composite mats providing surface protection across both construction and maintenance, repair and operations (MRO) applications. Yak predominantly serves customers in the utility and midstream verticals. For the year ended December 31, 2023, Yak generated $171 million of adjusted EBITDA on $353 million of adjusted revenue across over 40 U.S. states.

United Rentals expects to use a combination of new debt financing and existing capacity under its ABL facility to fund the transaction and related expenses.

Strong Strategic Rationale

• Yak creates a new adjacency for United Rentals’ Specialty business with scale in a large and growing segment. This combination will further the company’s ability to deliver value as a one-stop-shop for customers.
• Yak provides immediate cross-sell opportunities to both existing and new customers across construction and MRO applications.
• Yak shares many cultural similarities with United Rentals, including a customer-first business philosophy, long-term customer relationships and a strong focus on safety.

Robust Financial Drivers

• United Rentals sees significant potential to grow the matting business over the next several years, supported by attractive secular opportunities across both the energy and power markets, funded by public and private investments.
• The company expects to realize approximately $166 million in net present value of tax benefits included in the $1.1 billion purchase price.
• The company expects to realize a $7 million benefit to adjusted EBITDA, equivalent to approximately 2% of Yak’s adjusted revenue for 2023, by the end of year two after closing from cost synergies via operational efficiencies and overhead savings.
• The purchase price represents a multiple of 6.4 times adjusted EBITDA for 2023, and an adjusted purchase multiple of 5.2 times, net of tax benefits and cost synergies.
• The company expects the acquisition to be immediately accretive to earnings per share (EPS) and free cash flow (FCF) with an attractive return profile.
• The company expects a pro forma leverage ratio of approximately 1.7 times at closing, taking into account the expected debt financing to fund the acquisition and Yak’s adjusted EBITDA. This is within the company’s target range of 1.5-2.5 times.
• The transaction structure also provides for the potential for additional cash consideration to be paid to the seller, with a maximum payout of $50 million based on revenue attainment in the first two years after closing.

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