Cerberus Capital to buy United Rentals

Private equity group Cerberus Capital Management will acquire United Rentals Inc. for about $4 billion in cash, the equipment rental company said Monday.

Including about $2.6 billion in assumed debt, the transaction is valued at $6.6 billion.

Shares of United Rentals, one of the largest players in the construction-gear rental industry, have risen more than 16% since April 9, the day before the company said it might put itself up for sale. United Rentals jumped 61 cents to $32.98 on Monday.

United Rentals has a network of more than 690 rental locations in 48 states, 10 Canadian provinces and Mexico and more than 12,000 employees, according to the company. It serves construction and industrial customers, utilities, municipalities and homeowners.

The $34.50-a-share purchase price represents a 7% premium over United’s closing price of $32.37 on Friday.

“It’s a good deal,” said James D. Ragan, a stock analyst with Crowell, Weedon & Co. in Los Angeles. “We were hopeful that the price would be a bit higher, so it’s bittersweet.”

Crowell Weedon has no investment banking relationship with the company, Ragan said.

Last year, United Rentals posted profit of $224 million on revenue of $3.64 billion.

The company, whose board approved the transaction, said it could seek additional offers through Aug. 31. Holders of United Rentals’ preferred stock, including affiliates of Apollo Management, which control about 18% of the company’s voting power, have agreed to back the deal.