21.04.2016

Oz move for Vp

UK rental company Vp has acquired Australian rental company TR Pty for A$17.4 million (£9.5 million) in cash and assumed the company’s net debt of A$6.6 million (£3.6 million).

TR rents out specialist test & measurement, communications, and audio visual equipment in Australia, New Zealand and Malaysia. Founded in 1974 the company runs a combination of rental, sales, calibration and repair to electrical, telecommunications, manufacturing, construction, defence, oil and gas, mining, and government. With a head office in Melbourne, it operates from 13 locations and employs 170.

Revenues in the year to end of June 2015 were A$33 million with pre-tax profits of A$3.0 million, at the same time net asset value was A$9.9 million. The acquisition was an all share deal.

Vp chairman Jeremy Pilkington said: "In recent years the Vp group has made strong progress based mainly on its operations within the UK. It has been our aspiration for some time to increase the group's overseas presence, given the right opportunity. We are therefore very pleased to have acquired the TR business and warmly welcome the whole TR team to Vp”.

“TR is a market leading, specialist rental provider, consistent with the key attributes of all businesses within Vp. We are excited by the quality of this business and believe that by working with and supporting the TR team going forward we will, together, be able to deliver further incremental growth and development."

Vertikal Comment

This is a curious move on the part of Vp, it currently operates mostly in the UK, although its TPA portable roadway business also operates in Germany. The last time it acquired outside of Europe, and possibly the UK was around 30 years ago or so, when as Vibroplant, it went on a access rental buying spree in the USA, which nearly did for the company.

Since then it has built up a solid UK business with a strong balance sheet and conservative ratios, in general, rail, portable roadway, telehandler and oilfield rental sectors. While this latest acquisition might look strange it is possible that it could take the group into a new sector that has substantial potential in the UK as well as its current markets. It will be interesting to see how it develops.