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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) JUNE 15, 1998
U. S. RENTALS, INC.
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(Exact name of registrant as specified in charter)
DELAWARE 1-12623 94-3061974
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(State or other (Commission (IRS employer
jurisdiction of file number) identification
incorporation) number)
1581 CUMMINS DRIVE, SUITE 155, MODESTO CA 95358
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(Address of principal executive offices)
(209) 544-9000
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(Registrant's telephone number, including area code)
_____________________________________________________________
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
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U.S. Rentals, Inc., a Delaware corporation (the "Company"), entered
into an Agreement and Plan of Merger, dated as of June 15, 1998 (the "Merger
Agreement"), among the Company, United Rentals, Inc., a Delaware corporation
("United"), and UR Acquisition Corporation, a Delaware corporation and wholly-
owned subsidiary of United ("Merger Sub"), pursuant to which, subject to the
terms and conditions set forth therein, Merger Sub will be merged with and into
the Company, with the Company as the surviving corporation and wholly-owned
subsidiary of United (the "Merger"). In the Merger, each outstanding share of
common stock of the Company ("Company Common Stock") will be converted into the
right to receive 0.9625 of a share of common stock of United ("United Common
Stock"). The Merger is conditioned upon, among other things, (i) adoption of
the Merger Agreement by the stockholders of the Company, (ii) approval by the
stockholders of United of (A) an amendment to United's certificate of
incorporation to increase the number of authorized shares of United Common Stock
and (B) the issuance of United Common Stock in exchange for Company Common Stock
in the Merger pursuant to the Merger Agreement, and (iii) the termination or
expiration of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976. Richard D. Colburn, the Company's Chairman and
largest stockholder, has agreed with United to vote all shares owned by him in
favor of the transactions contemplated by the Merger Agreement, and Bradley S.
Jacobs, United's Chairman and largest stockholder, has agreed with the Company
to vote all shares owned by him in favor of the transactions contemplated by the
Merger Agreement. A copy of the joint press release of the Company and United
relating to the execution of the Merger Agreement is attached hereto as an
exhibit and is incorporated herein by reference.
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ITEM 7. EXHIBITS
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<TABLE>
<CAPTION>
Exhibit No. Name of Item Page No.
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<C> <S> <C>
99.1 Joint Press Release of USR and United, dated
June 16, 1998, relating to the execution of a
definitive agreement for the merger of a special
purpose subsidiary of United with and into USR
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
U.S. RENTALS, INC.
Date: June 19, 1998 By: /s/ John S. McKinney
____________________________________
Name: John S. McKinney
Title: Vice President - Finance, and
Chief Financial Officer
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Exhibit 99.1
FOR IMMEDIATE RELEASE
UNITED RENTALS TO MERGE WITH U.S. RENTALS, CREATING LARGEST EQUIPMENT
RENTAL COMPANY IN NORTH AMERICA
Transaction Expected to be Significantly Accretive to United Rentals'
Earnings
GREENWICH, CT, and MODESTO, CA, JUNE 16, 1998 - United Rentals, Inc.
(NYSE: URI) and U.S. Rentals, Inc. (NYSE: USR) today jointly announced that
their respective boards of directors have unanimously approved a definitive
agreement to merge the two companies, creating the largest equipment rental
company in North America, with 296 rental locations in 33 states, Canada and
Mexico. Under the terms of the agreement, U.S. Rentals shareholders will
receive 0.9625 shares of United Rentals common stock for each U.S. Rentals share
in a tax-free pooling of interests. The merger, which is subject to Hart-Scott-
Rodino clearance, shareholder approvals and other customary conditions, is
expected to close before the end of September 1998.
United Rentals Chairman and Chief Executive Officer Bradley Jacobs
said, "We are uniting two industry leaders to create the largest and most
dynamic equipment rental company in North America. This merger strengthens our
combined operations and is significantly accretive to earnings. It provides
numerous opportunities to achieve economies of scale and other synergies,
including the ability to share equipment between United Rentals and U.S. Rentals
branches."
Mr. Jacobs added, "U.S. Rentals has long been recognized for its
outstanding management team and strong asset base. The combined company will
have the management depth, geographic scope, and diverse equipment fleet to
efficiently meet the needs of an expanding range of customers. With this
merger, we will create a world-class organization, which will be well prepared
to grow in a rapid and highly disciplined manner."
The new company, which will operate under the name United Rentals,
Inc., will have an aggregate equity market capitalization of approximately $2.1
billion, and an annual revenue run rate of approximately $1.4 billion, including
acquisitions currently under non-binding letters of intent. The combined
company's present customer base includes over 500,000 customers, comprised of
construction industry participants, industrial and commercial companies,
homeowners and other individuals.
U.S. Rentals Chairman Richard Colburn said, "We are very excited about
joining forces with United Rentals to capitalize on the many growth
opportunities in the equipment rental industry. There are substantial operating
benefits available to the larger companies in this industry, including greater
purchasing power with equipment suppliers, the opportunity to achieve increased
utilization of the rental fleet by sharing equipment between
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branches, and the ability to sell used equipment more efficiently through a
nationwide sales force."
Mr. Jacobs will continue to serve as chairman and chief executive
officer following the merger. Mr. Colburn will join the United Rentals board of
directors as chairman emeritus. Wayland Hicks, chief operating officer of
United Rentals, will continue to serve in that position for the new company, and
will take on the added role of vice chairman. The members of U.S. Rentals'
management team will play key roles in the new company. Bill Berry, president
and chief executive officer of U.S Rentals, will become president of the
combined company, with responsibility for day-to-day operations, and will report
directly to Mr. Hicks. In addition, Mr. Berry will join the board of directors
of United Rentals. John Milne, vice chairman and chief acquisition officer of
United Rentals, and Michael Nolan, chief financial officer of United Rentals,
will continue to serve in these positions in the combined company. John
McKinney, chief financial officer for U.S. Rentals, will serve as vice
president, finance for the new company. U.S. Rentals will also nominate two
additional directors to the United Rentals board.
Separately, United Rentals also announced today that it completed the
acquisitions of 10 equipment rental companies, with aggregate 1997 revenues of
approximately $121 million. This latest round of acquisitions adds 47 branches
located in nine states and Canada. The companies acquired consist of Power
Rental Co., Inc. (headquartered in Oregon), Grand Valley Equipment Co., Inc.
(Michigan), Gaedke Equipment Co. (Texas), Reitzel Rental Ltd. (Ontario), Select
Equipment Ltd. (Ontario), Yankee Equipment Corp. (Connecticut), Dealers Service
Co. (New Jersey), Sky King Equipment Ltd. (Ontario), Madison Equipment Sales &
Rentals, Inc. (Alabama) and Georgian Sales & Construction Rentals Ltd.
(Ontario).
John Milne, vice chairman and chief acquisition officer, said, "After
closing the ten acquisitions announced today, United Rentals has non-binding
letters of intent to acquire 24 rental companies, with 130 locations and
aggregate annual revenues of approximately $342 million. This industry remains
highly fragmented, with the top 10 companies having less than a 15% share of the
North American market. As a result, we continue to see many opportunities to
acquire quality equipment rental companies at attractive valuations."
Goldman, Sachs & Co. served as financial advisor to United Rentals,
and Donaldson, Lufkin & Jenrette Securities Corporation served as financial
advisor to U.S. Rentals.
United Rentals, Inc. is a leading equipment rental company serving the
construction industry, industrial and commercial concerns, homeowners and other
individuals, through its present network of 170 locations in 24 states and
Canada. The company offers for rent a broad range of equipment, including
backhoes, forklifts, aerial manlifts, generators, pumps and hand tools. The
company was founded in September 1997 by the former core management team of
United Waste Systems, Inc., a solid waste management company that was acquired
by USA Waste Services, Inc. last August in a transaction valued at approximately
$2.5 billion. United Rentals entered the equipment rental industry by acquiring
six established rental companies in October 1997, completed its initial public
offering in December 1997 and a follow-
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on equity offering in March 1998, and completed a senior subordinated notes
offering in May 1998. Since its inception, the company has acquired 50 rental
companies across the United States and Canada. United Rentals was recently
ranked as the sixth largest equipment rental company in North America by RER
Magazine, a leading industry publication.
U.S. Rentals, which has been in the equipment rental business since
1957, is the second largest equipment rental company in North America. The
company currently operates 126 rental locations in 22 states and serves a
diverse base of commercial and residential construction, industrial, and
homeowner customers. U.S. Rentals completed its initial public offering in
February 1997 and completed a senior notes offering in April 1998. The company's
growth has been primarily driven by strong same-store sales increases resulting
from ongoing investments in expanding and modernizing the rental fleet, cold
starts of new rental locations and acquisitions.
The matters discussed in this news release include certain forward-
looking statements that involve specific risks and uncertainties, which could
cause actual results to differ materially from those forward-looking statements.
These include, but are not limited to, general economic conditions, the impact
of interest rate fluctuations, seasonal rental patterns principally due to the
effects of weather, increased competition, the timing and cost of acquisitions,
the availability of additional capital to fund future acquisitions, and other
risks detailed in each company's recent filings with the Securities and Exchange
Commission. The companies make no commitment to disclose any revisions to
forward-looking statements, or any facts, events or circumstances after the date
hereof that may bear upon forward-looking statements.
Contact: Contact:
Robert Miner John McKinney
United Rentals, Inc. U.S. Rentals, Inc.
(203) 622-3131, Ext. 118 (209) 544-9636
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