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Volvo sells Volvo Rents to California private equity firm

volvorentsDec. 10. 2013 - As part of its strategic effort to focus on the core business, the Volvo Group has agreed to sell Volvo Rents to the US private equity firm Platinum Equity for approximately USD$1.1 billion. At closing, net financial debt in the Volvo Group’s Industrial Operation is expected to be reduced by the same amount. A pre-requisite for completion of the transaction is that Platinum Equity is successful in a debt offering to be made to finance its acquisition. Volvo CE will continue to sell products to Volvo Rents under the new ownership.


December 10, 2013
By Volvo Construction Equipment


volvorentsDec. 10. 2013 – As part of its strategic effort to focus on the core
business, the Volvo Group has agreed to sell Volvo Rents to the US
private equity firm Platinum Equity for approximately USD$1.1 billion.
At closing, net financial debt in the Volvo Group’s Industrial Operation
is expected to be reduced by the same amount. A
pre-requisite for completion of the transaction is that Platinum Equity
is successful in a debt offering to be made to finance its acquisition.
Volvo CE will continue to sell products to Volvo Rents under the new
ownership.

 

“We looked at different alternatives to grow
Volvo Rents’ business and concluded that the best alternative is to sell
the operation to another owner. Volvo Rents’ business does not have a
sufficiently strong connection with the group’s core operation to
motivate continued ownership,” says Olof Persson, Volvo Group president
and CEO.

The transaction is expected
to have a negative impact on operating income in the segment “Group
functions, corporate functions and other” within the Industrial
Operation in an amount of approx. USD $230 M in
the fourth quarter of 2013.

The transaction is expected to be closed in the first quarter of 2014
and is at that time expected to have a positive impact on the cash flow
for the Volvo Group of USD $1.1 billion. The
sale of Volvo Rents is expected to decrease the net financial debt for
the Industrial Operation by USD $1.1 billion,
corresponding to a reduction of the net financial debt to equity ratio
for the Industrial Operation as calculated per the third quarter of 2013
by approximately 10 percentage points.

Volvo Rents, formed in 2001, offers rental of a comprehensive range
of machines intended for the construction and engineering industry,
including Volvo CE products. Volvo Rents has operations in the US,
Canada and Puerto Rico and has about 2,100 employees. 


Platinum Equity is a California-based global investment firm with a
highly specialized focus on business operations.  The firm has
significant experience investing in companies that serve the
construction, commercial and industrial equipment rental market.

All of Volvo Rents’ employees will remain with the company as it is
sold. Volvo Rents’ customers will not be affected by the transaction,
and Volvo CE will continue to sell products to Volvo Rents under the new
ownership.

Completion of the transaction is subject to certain conditions, including the approval of relevant authorities.

For more information

volvoce.com


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