Listed hire company Hirequip today announced it had bought central North Island company Ready Hire Ltd for $21.2 million.
Hirequip also said it had conditionally agreed to sell its 30 per cent shareholding in the Northwood Supa Centa for an expected profit of $3 million. Conditions in the contract are expected
to be satisfied by mid January.
Hirequip executive chairman Graeme Wong said the Ready Hire purchase would lift the annual turnover of the equipment hire and sales part of Hirequip's business by $15 million to $65 million.
Settlement takes place on January 28. The acquisition will be funded from cash flow and internal borrowing facilities.
Ready Hire has 13 branches located in the Waikato, Bay of Plenty, Hawke's Bay, Manawatu-Wanganui and Thames Valley. The owners, Kevin Gallichan, Richard Grainger and Brian Corban, have revamped the company over the past decade.
Mr Wong said that since the change of name from Southern Capital to Hirequip, the company had been seeking to buy other hire equipment businesses.
"Ready Hire provided an excellent opportunity to materially grow our business," Mr Wong said.
"We now look to further grow our existing hire company, branch expansion and the acquisition of smaller equipment hire providers with a strong local presence," Mr Wong said.
Hirequip is offering to employ Ready Hire staff on substantially the same terms and conditions and said it was hopeful all employees would accept.
Prior to this acquisition, Hirequip in the last year has invested $15.9 million in plant and equipment including $1.6 million spent bringing off balance sheet funded assets onto the balance sheet. Equipment sales amounted to $2.6 million and depreciation financed a further $6.7 million.
The branch network has also been upgraded with the refurbishment or building of new facilities in Stoke, Wanaka, Central Wellington, New Plymouth, Mt Manganui and Mt Wellington, Auckland. Further branch refurbishment and expansion is planned for the coming year.
Hirequip shares closed yesterday at 90 cents having traded between 53 and 95 cents in the last 12 months.
- NZPA
