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United Rentals to acquire RSC Holdings

Transaction expected to generate over $200 million of annual cost savings, with additional revenue and cash flow upside

United Rentals, Inc. and RSC Holdings, Inc. announced on December 16, 2011, that they have entered into a definitive merger agreement under which United Rentals will acquire RSC in a cash-and-stock transaction valued at $18.00 per share, or a total enterprise value of $4.2 billion, including $2.3 billion of net debt. The Boards of Directors of both companies have unanimously approved the proposed transaction and recommended that their respective stockholders approve the proposed transaction. 

The proposed transaction will create a leading North American equipment rental company with a more attractive business mix, greater scale and enhanced growth prospects. The combination is also expected to accelerate United Rentals’ growth with industrial customers as well as provide a lower cost base and a less volatile revenue profile to better position the company through all phases of the business cycle. The new United Rentals is well-positioned to benefit from increased rental penetration, the continued strength of the industrial sector, serving customers across a variety of industries and a recovery in construction activity. United Rentals and RSC have already begun working on a plan to facilitate a smooth integration of the businesses and realization of over $200 million of potential cost savings.

Michael Kneeland, President and Chief Executive Officer of United Rentals said, “This transaction marks a transformative moment in our company’s history. Combining the experience and resources of two top performing equipment rental companies creates an exceptional company. The new United Rentals will build upon the best practices and management teams from both companies to deliver superior customer benefits and enhanced value for our stockholders. With the best talent in the industry, we have a tremendous opportunity to become the supplier of choice for customers throughout North America.”

Erik Olsson, RSC’s Chief Executive Officer and President, said, “RSC has a strong track record of profitable growth and we are proud of what we have built. At the same time, I am confident that by partnering with United Rentals we can accomplish far more than either company could have achieved on its own, including significant synergies. As a result, the transaction delivers significant value to our shareholders. Our similar customer-centric cultures and commitment to operational excellence will provide even greater value to our customers and facilitate a smooth integration. I look forward to helping to lead the integration process during a transition period.”

Upon the close of the transaction, three of RSC’s independent directors will receive seats on United Rentals’ existing Board of Directors.

Michael Kneeland, President and Chief Executive Officer of United Rentals, and Jenne Britell, United Rentals’ Chairman, will remain in their positions at the combined company.