Coates Hire says ‘no sale’

By Murray Pollok18 March 2008

Coates has a fast-growing rental business in Indonesia.

Coates has a fast-growing rental business in Indonesia.

Coates Hire has decided against a sale of the company and said its board unanimously decided that the bids received had “failed on price”.

Coates has been undergoing a strategic review since May this year when it was approached by some potential buyers. However, Coates chairman, Bill Cutbush, said bids undervalued the company; “Similarly, the bids do not reflect any appropriate synergy benefits that would be available, particularly considering Coates' leading market position and strong geographical footprint.”

According to the Australian Financial Review, one of the bids was a joint effort by private equity firm Carlyle Group and National Hire Group, which is Coates' largest domestic competitor. The same paper reported that Loxam of France had considered making an offer.

Mr Cutbush said the company would now turn “their full attention to value enhancing strategies and the pursuit of a number of strategic initiatives, building on the successful re-structuring of the business in fiscal 2007.”

Meanwhile, Coates announced it would be acquiring parts of Prime Industrial Rentals, Atlas Copco's Australian rental business and part of its specialty rentals division.

Prime will retain its oil free and high pressure compressor rental operations, but sell the remainder of its rental business – comprising 2200 gensets, compressors, pumps, welders and lighting towers – to Coates for A$38,7 million (US$31,5 million). The sale includes four depots and 52 employees. Also as part of the transaction Atlas Copco will acquire Coates' fleet of oil-free compressors.

The sale is consistent with Atlas Copco's policy of focusing on industrial rentals and exiting the general/construction rental sector. The sale will close on 17 September.

Coates announced its annual financial results to 30 June on the same day as it reported the conclusions of its strategic review. Revenues rose 7,7% to A$770,4 million (US$627 million) and net profit after tax was up 9,4% to A$102,4 million (US$83,3 million).

Chief executive officer, Malcolm Jackman, said: “Amid mixed trading conditions, we have achieved a very solid result in the 2007 fiscal year… Especially pleasing are the year-on-year improvements in key margin ratios, with EBITDA and EBIT up to record highs of 41,7 percent and 22,85 percent respectively, reflecting on-going efficiencies in the business and improving economies of scale.”

MAGAZINE
NEWSLETTER
Delivered directly to your inbox, International Rental Newsletter features the pick of the breaking news stories, product launches, show reports and more from KHL's world-class editorial team.
Latest News
Loxam accelerates environmental shift
Equipment rental company aims to halve direct emissions by 2030 and cut indirect emissions by 30%
New HBOX+ lighting tower from Himoinsa
HBOX+ is designed for efficiency, connected remote control, safety and easy transport
Carrier Rental Systems launches ‘clean air’ fleet
Air scrubbers and filter units are designed to improve indoor air quality and improve productivity
CONNECT WITH THE TEAM
Murray Pollok Managing Editor Tel: +44(0)1505 850 043 E-mail: murray.pollok@khl.com
Simon Kelly Sales Manager Tel: +44 (0) 1892 786 223 E-mail: simon.kelly@khl.com
CONNECT WITH SOCIAL MEDIA