WesternOne sells to United
WesternOne has announced it has entered into a definitive agreement with United Rentals of Canada pursuant to which United Rentals has agreed to acquire WesternOne's equipment rentals and heat business and substantially all of the related assets for a base cash purchase price of $120 million.
A Special Committee of the board of directors of WesternOne oversaw an extensive strategic review process starting in 2016 and considered a number of alternatives to maximize shareholder value. This process initially resulted in the sale of WesternOne's modular rental and construction division in 2017 and now in the proposed sale of its remaining division.
WesternOne is a leading regional equipment rental provider of aerial lifts and heat solutions in Western Canada, with additional offerings of temporary power, general construction equipment and fuel delivery. The company’s 12 locations and approximately 330 employees serve primarily non-residential construction and industrial customers in Alberta, British Columbia and Manitoba, with a notable presence in the sports and entertainment vertical.
Michael Kneeland, chief executive officer of United Rentals, said, “The acquisition of WesternOne Rentals & Sales will expand both our general rental and specialty offerings in key Canadian provinces. WesternOne’s aerial and portable heat rentals dovetail with our own range for construction and industrial customers. We’ll also gain scale and diversification in two areas: the sports and entertainment vertical, with a focus on film and television production, and a comprehensive propane and diesel fuel service.”
Kneeland continued, “In addition, the combination directly aligns with our vision for customer service. We particularly like the fact that WesternOne’s culture focuses on people and innovation. In addition to cross-selling our equipment and services, we’ll be able to give our combined customer base the benefit of new expertise and a larger pool of shared technology. We look forward to welcoming WesternOne employees to United Rentals.”
"Following careful review of this transaction by the Special Committee in consultation with our external financial and legal advisors, we believe it is the best option for WesternOne and its shareholders." said Peter Blake, CEO of WesternOne. "The midpoint of the range of anticipated proceeds to ultimately be paid to shareholders exceeds the 20-day volume weighted average share price by approximately 42% which represents an attractive result for our shareholders."
After considering the recommendations of the Special Committee, the transaction has been approved unanimously by WesternOne's board of directors, which has determined that the transaction is in the best interests of WesternOne and its shareholders and recommends that shareholders vote in favour of approving the transaction at a special meeting of shareholders, which is expected to be scheduled for November 28. Evans & Evans, Inc., an independent financial advisor to the Special Committee, has provided an opinion that, subject to the assumptions and limitations upon which the opinion is based, the consideration to be received by WesternOne in this transaction is fair from a financial point of view.
The completion of the proposed transaction will allow WesternOne to wind-up its operations and return to its shareholders the net proceeds of the sale of the Business, after repayment of all bank debt and other liabilities including the outstanding convertible debentures, taxes and transaction related expenses as part of a Court approved liquidation process.
At the Meeting, shareholders will also be asked to approve a plan of liquidation for WesternOne. While there is no guarantee as to the net amount of distributions to shareholders following the sale of the Business, WesternOne currently estimates, after repayment of all Obligations, to distribute in aggregate a per share amount in the range of approximately $2.20 to $2.43. Following the completion of the sale of the Business, the common shares and convertible debentures of WesternOne are expected to cease trading and, pursuant to a voluntary application to be made to the Toronto Stock Exchange, be delisted. It is a term of the plan of liquidation that following the implementation of the liquidation and delisting from the TSX, all transfers of common shares and debentures thereafter will be void unless made with the explicit sanction of the liquidator.