RentX Industries, Denver, has agreed to be acquired by Meyer USA, the U.S. unit of Meyer International of London, for $98.7 million, including cash and assumption of debt. The deal is expected to be completed in July.

The 72 RentX stores, with 1998 revenues of $55.4 million, give Meyer a sizable platform for rapid expansion of operations in the United States. RentX had accumulated a total of 77 stores since its launch in 1996, but sold five of them to Neff in June.

Meyer ("mayor") is the parent of Jewson Hire Point, the third-largest tool rental operation in the United Kingdom, with 1998 revenues of more than $1.3 billion and operating profit of $109 million - an increase of 66 percent.

RentX CEO Skip Evans told Rental Management he was "delighted to join the Meyer group" and said that as a condition of the deal, he would stay on to run the company for a year.

Meyer CEO Alan Peterson said: "The acquisition of the RentX branches gives us a firm foothold from which to grow tool hire further in the U.S." and "complements the development of our tool hire business in the U.K." Meyer has grown its hire (rental) business by acquisition and "organically" (startups), in about equal measure, to 172 locations since 1985.

Evans said the market mix would "stay exactly as we are now, primarily light contractors and homeowners, plus some party clients," for the foreseeable future.

But Evans may now be able to resume growing RentX, with the help of Meyer's considerable financial strength. In 1998, the corporation earned $135.6 million in operating profit, on revenues of $2.039 billion, reduced net borrowings considerably and raised $109 million in disposals. Revenues were up 29 percent and operating profit was up 39 percent, providing plenty of operating leverage on top of a strong balance sheet.

"We have identified three or four [possible] acquisitions that we're talking to," Evans confirmed, "and a number of others" - perhaps as many as 30 - that RentX had been in contact with over the past year but lacked the means to pursue expansion.

RentX operates in 11 states at present, primarily in the western and south-central United States.

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