We Like United Rentals’ Move to Acquire Ahern Rentals for $2 Billion in Cash

On Nov. 14, United Rentals announced its acquisition of the eighth-largest equipment rental company in North America, Ahern Rentals. United is set to pay $2 billion in cash, with an acquisition multiple of 6.5 times EV/LTM adjusted EBITDA (as of September 2022). Management expects to realize $40 million in run-rate cost synergies roughly 12-18 months after the deal closes. Nearly 90% of the synergies will come from selling, general, and administrative cost reductions, with the balance coming from branch consolidation. On the revenue side, the firm is targeting $60 million in cross-sell synergies. Ahern has primarily been focused on general rental equipment, presenting United Rentals an opportunity to cross-sell its specialty equipment.