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£320m deal puts Ashtead in top five US plant hirers

Finance

PLANT hire group Ashtead last week unveiled one of the biggest acquisitions in the sector when it paid £320 million to acquire BET USA Inc, the US plant armof Rentokil Initial.

The deal propels Ashtead into the top five in the US plant hire market.

Ashtead chairman Peter Lewis said: 'This significantly increases the number of our locations, extends our geographical presence and expands our product and customer bases.'

The deal ends an 18-month search by Ashtead for a major US acquisition and marks a major step in its strategy to seek growth.

And it comes 10 weeks after Ashtead disappointed investors by declaring that it intended to retain its independence. This came at the end of a strategic review expected to lead to the company putting itself up for sale.

Ashtead is financing the US deal through new borrowing and the issue of a £134 million convertible loan note.

Mr Lewis said the new business, to be known as BPS Aggregate, provided a good strategic fit with its US operations and that it would benefit from complementary products and customer bases as well as economies of scale.

Ashtead has increased turnover at its existing US operations four-fold in the past three years and Mr Lewis said this gave the firm confidence it could improve the performance of BPS Aggregate as part of a group focused on equipment rental.

BPS Aggregate made an operating profit of £30 million on sales of £237 million in the year ending December 31.