On April 30, it will have been one year since United Rentals completed its merger with RSC to create North America’s largest equipment rental company. In following the company’s quarterly results conference calls with analysts and recently speaking with Michael Kneeland, United Rentals president and CEO, about the one year anniversary, it seems that the integration process has been smooth and the results speak
United Rentals revenues are on the rise, cost synergies have been greater than expected, the company is expanding its rental fleet to meet the needs of its customers and its rental rates are on the rise.
These results should not come as a surprise. As Kneeland points out, United Rentals has had plenty of experience in mergers and acquisitions, so they know a thing or two about integrating companies. “We didn’t wake up one day and say, ‘Let’s merge with RSC.’ We have had a team for quite some time working on integration plans and how to frame it without a real acquisition target. We were doing exercises on what would have to be true to have a certain outcome, so we reverse engineered the integration,” Kneeland says in Rental Management’s exclusive interview starting on page 30.
What’s been more surprising is that no one else has really followed in the footsteps of United Rentals. Yes, Hertz Equipment Rental Corp. (HERC) has made some strategic acquisitions, expanding into things like entertainment rentals. Sumitomo in Japan has increased its stake in Sunstate Rentals and Sunbelt Rentals keeps expanding its specialty division. Volvo Rents has been very active over the last year, acquiring scores of rental companies to expand its network of owned-and-operated rental stores, but the proverbial other “shoe” has not dropped when it comes to blockbuster mergers in the equipment rental industry.
Then again, maybe it will happen next week, next month or next year, just like the United Rentals and RSC deal surprised many in the industry.
After all, the equipment rental industry is on the rise. Our cover story in this month’s issue outlines the American Rental Association’s facts and figures on the size of the industry as well as the five-year forecast for rental revenues in North America, starting on page 22. Total 2012 North American equipment rental revenue of $35.7 billion includes the United States and Canada, as well as the three rental market segments — construction/industrial, general tool, and party and event.
The ARA Rental Market Monitor™, in fact, now projects equipment rental revenue in 2017 to reach $51.5 billion, based on analyses and econometric modeling developed by IHS Global Insight for ARA and supported by Rental Management.
ARA started working with IHS Global Insight in 2005 to build an equipment rental industry research program from scratch because no one had made the investment before to try to determine the actual size of the industry. ARA didn’t just choose IHS Global Insight’s name out of a hat. It was an extensive search, looking for the right company with the right expertise to take on such a task. IHS Global Insight has 325 economists and analysts worldwide covering 170 industries.
“Our partnership with IHS Global Insight led to the creation of the only rental-special research available for the three segments of the equipment rental industry, built from reputable econometric models specific to each segment of the industry,” says Christine Wehrman, ARA’s executive vice president and CEO.
No other organization or individual has made the type of commitment ARA and Rental Management have made to industry research, working with an organization that is ranked as one of the world’s most accurate economic forecasting firms by The Wall Street Journal, Reuters and USA Today.
Wayne Walley is editor for Rental Management, the official magazine of the American Rental Association, 1900 19th St., Moline, IL 61265. He can be reached at 800-334-2177, ext. 253, or 309-277-4253; fax 309-764-2747; email@example.com.