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Custom Truck One Source goes for $1.47B to Nesco

A year after its revenue hit $1 billion for the first time, Kansas City-based Custom Truck One Source will be acquired by Nesco Holdings for $1.475 billion. Custom Truck has grown to employ 1,700 since its start in 1996 and with Nesco will form one leading specialty rental equipment company.

Nesco Holdings Inc. has signed a definitive agreement to acquire Kansas City-based Custom Truck One Source for $1.47 billion.

Image courtesy Custom Truck One Source

Both Custom Truck and Fort Wayne, Indiana-based Nesco possess complementary business lines, customer bases and capabilities. Each is a considered leading providers of specialized truck and heavy equipment solutions including rental, sales and aftermarket parts and service.

Custom Truck formed 24 years ago in 1996 among six siblings with 15 employees. Today, that number has grown to 1,700 and last year, the company’s revenue hit $1 billion for the first time.

With complementary business lines, customer bases and capabilities, the combination is expected to yield significant benefits from increased scale, breadth of product and service offerings and expanded geographic coverage.

Following closing, the combined company will have a more attractive financial profile with significantly reduced leverage and enhanced liquidity providing flexibility to address anticipated demand in the large and growing addressable market in which it operates.

“We are excited to bring together our complementary companies to provide a full range of solutions to our customers,” Fred Ross, CEO of Custom Truck said. “Looking ahead, as a combined company, we will be very well positioned to capitalize on a broad range of growth opportunities and better serve our customers’ specialty rental equipment needs on a national basis.”

In connection with the transaction, an affiliate of Platinum Equity, LLC (“Platinum”) has committed to invest over $850 million into Nesco in exchange for newly issued common stock at a price of $5.00 per share.

In addition, existing CTOS shareholders, including certain funds managed by The Blackstone Group, Inc. (“Blackstone”), in its capacity as the current majority owner of CTOS, and certain members of the CTOS management team, are expected to invest approximately $100 million into Nesco in exchange for newly issued common stock also at the same price as Platinum.