United Rentals to buy NES Rentals for $965 million

(Reuters) - United Rentals Inc URI.N, the world's largest equipment rental company, said on Wednesday it would buy NES Rentals Holdings II Inc for about $965 million in cash.

Stamford, Connecticut-based United Rentals said the deal would expand its presence in the U.S. East Coast, Gulf states and the Midwest.

Like United Rentals, NES Rentals rents out construction equipment such as cranes and forklifts to customers in the industrial and non-residential construction sectors. It generated $369 million in revenue in 2016.

United Rentals’ shares were up 8.3 percent in extended trading on Wednesday.

The company said the deal was expected to immediately add to its adjusted earnings per share and free-cash flow generation in 2017.

The deal was approved by the board of United Rentals and Diamond Castle Holdings LLC, the majority owner of NES.

United Rentals also reported better-than-expected fourth-quarter profit and revenue, driven by higher demand for its rental equipment.

The company forecast 2017 revenue to be in the range of $5.75 billion-$5.95 billion, above the average analyst estimate of $5.73 billion.

Reporting by Radhika Rukmangadhan in Bengaluru; Editing by Sriraj Kalluvila and Saumyadeb Chakrabarty