Hirepool builds up to do battle

By PAM GRAHAM

Investors are betting on consolidation in the transport sector this year, but it is already well under way in the equipment hire industry.

One player is Tenby Powell, husband of tech queen Sharon Hunter, who is now running Hirepool, the rental business sold by transport company Owens Group last year.

Rival Hirequip owns Projex, Powell's old firm, and outbid Hirepool to buy Ready Hire.

Hirepool has just snatched an independent in South Auckland from under Hirequip's nose and wants to build a national business from its Auckland stronghold.

That puts it up against Hirequip, the listed company with Graeme Wong as executive chairman, which has been expanding north.

Ready Hire gave Hirequip 13 North Island branches and has signalled further expansion.

"We are very comfortable to have not bought Ready Hire," said Powell. "We had a greenfields strategy ready to go and are actioning that expediently since we were advised we were not going to be the successful bidder for Ready Hire."

Hirepool has purchased Hire King, an independent that has occupied a prominent corner site in Takanini for 14 years, from the Turner family. Mike Turner will continue as branch manager and eight staff have kept their jobs.

Hirepool has also opened a branch in New Plymouth, secured a site in Tauranga and hired some staff from Ready Hire. The Takanini purchase helps it protect its Auckland market.

Hirepool itself was bought for $46.6 million last year, with JBWere's Private Equity No 1 Fund taking a 51 per cent stake, and Hunter Powell Investments and Owens Group each taking 24.5 per cent.

Powell said Hirepool was performing above budget, though he would not disclose figures.

Would Hirepool consider a sharemarket listing? "JBWere and I need to really discuss that together and it would be imprudent of me to comment right now," said Powell. Expansion had been financed from cashflow.

The Takanini purchase was negotiated in 72 hours. When Hirepool approached Hire King, the Turners had been talking to Hirequip.

Turner said it would be harder for independents in future as the big guys got bigger.

He had been approached by one company and talked to two others before selling to Hirepool. Its integrity and commitment to developing staff had helped swing the deal.

"I met a lot of their existing staff who were long-standing and they all seemed happy in their job, and that to me is a sign of a company that is well balanced and well run."

The rivals

HIREQUIP

* NZX listed, formerly Southern Capital

* Executive chairman: Graeme Wong

* Market value: $115 million

* Based in Wellington

HIREPOOL

* Private company 51 per cent owned by JBWere fund

* Hunter Powell Investments and Owens Group own 24.5 per cent each

* Valued at $47 million last year

* Managing director: Tenby Powell

* Based in Auckland