Nesco Holdings, Inc. (NYSE: NSCO) reported entry into a definitive agreement to acquire Custom Truck One Source for a price of USD 1.475 Billion. The acquisition will create a one stop shop provider of rental equipment that serve attractive and growing infrastructure end markets. These markets include transmission and distribution, 5G revolution build out, critical rail and other infrastructure initiatives. Increased scale, service offerings and expanded geographic coverage from the acquisition will yield significant benefits.
An affiliate of Platinum Equity, LLC has also committed to invest over USD 850 Million into Nesco in exchange for newly issued common stock at USD 5 per share. Energy Capital Partners and Capitol Investment together own 70% of Nesco’s outstanding common stock and will continue to retain their ownership positions in the company as they have entered into voting agreements in support of the transaction.
“Since Capitol’s investment in Nesco last year, our number one strategic priority has been to find a way to bring these two companies together, given the significant value inherent in the combination. With enhanced scale, a broader set of capabilities and vastly improved financial flexibility, we believe the new company will be distinctively well-positioned to take advantage of the anticipated growth in critical U.S. infrastructure efforts in energy, telecom and rail over the near term and beyond,” said Mark Ein, Chairman & CEO of Capitol and Vice Chairman of Nesco. “We are very pleased to partner with Platinum given its deep knowledge and strong track record in the equipment rental industry, as well as the existing CTOS shareholders led by Blackstone. Together with Platinum and our other co-investors and the combined company’s Board and management team, we look forward to capturing the meaningful upside opportunities that lie ahead.”