Transcat further expands its higher margin rental business with the acquisition of Becnel Rental Tools, Inc.

Transcat, Inc. (Nasdaq: TRNS) (“Transcat” or the “Company”), a leading provider of accredited calibration services, cost control and optimization services, and distribution and rental of value-added professional grade handheld test, measurement, and control instrumentation, announced that it has acquired privately-held Becnel Rental Tools LLC (Becnel), effective April 15, 2024. The $50 million purchase price was paid in combination of $32.5 million in Company stock and $17.5 million in cash and is subject to certain customary holdback provisions.

Founded in 2012, Becnel is an ISO 9001:2015 certified provider of rental tools and services primarily utilized in the decommissioning and maintenance of oil wells. The company’s management team has vast experience operating and servicing customers in these highly regulated end markets. The existing staff and leadership team, led by current Becnel President Jason Becnel, will remain in place to strategically drive the business and service customers’ needs.

“Becnel is a well-run business, with great leadership and significant industry experience in the rental of equipment used in the highly regulated end markets associated with decommissioning and maintenance of oil wells. They have demonstrated the ability to scale in support of the growing number of wells that are in need of decommissioning, and we believe that the resources and expertise that Transcat brings to the table, will position Becnel well for continued growth to take advantage of the tens of thousands of wells targeted to be decommissioned in the next 10 to 15 years and beyond, as well as future service expansion opportunities,” according to Lee Rudow, President and Chief Executive Officer. “Becnel operates in a niche part of the oil and gas industry, and we believe the business is largely isolated from the inherent market volatility. Their customer relationships are very strong and as a result, we believe that the highly regulated markets that Becnel serves, will provide significant opportunity for cross-selling of Transcat’s calibration services, as well as our core distribution products.”

Mr. Rudow added, “We continue to find the rental business very attractive and view Becnel as a great addition to our rental portfolio. In addition, within their current business model, Becnel has an attractive service revenue component that works hand in hand with their equipment rentals. Similar to the rest of our rental portfolio, this business performs very well financially and will provide expansion to our overall Gross Margins and EBITDA Margins for both our Service and Distribution segments. The total acquired EBITDA for this deal is approximately $5.8 million.”