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Hirequip Buys North Island Equipment Hire Business

Hirequip Buys North Island Equipment Hire Business, Ready Hire

Listed hire company Hirequip today announced it has bought the assets and business of Ready Hire Limited for $21.2 million. Settlement takes place on 28 January 2004.

Hirequip’s Executive Chairman Graeme Wong said, “This is a significant acquisition for Hirequip. The annual turnover of the equipment hire and sales part of our business is around $50m and Ready Hire will add a further $15m. So the Ready Hire acquisition will grow Hirequip’s hire equipment revenue by nearly one third. ”

The acquisition will be funded from cash flow and by utilising the company’s borrowing facilities, which were reorganised pursuant to shareholder approval given at the annual meeting held last month.

Ready Hire has a strong presence throughout the central North Island with 13 branches located throughout the Waikato, Bay of Plenty, Hawke’s Bay, Manawatu-Wanganui and Thames Valley. The owners of Ready Hire are Kevin Gallichan, Richard Grainger and Brian Corban. Under this ownership the company has undergone considerable growth over the past decade.

“Since the change of name from Southern Capital to Hirequip, to better reflect our new focus and direction, we have actively sought opportunities to make further hire equipment business investments. Ready Hire provided an excellent opportunity to materially grow our business,” Mr Wong said.

Stuart McKinlay, the founder and Managing Director of Hirequip Limited said, “Ready Hire is a strong, well established regional operation that will complement Hirequip’s business. Ready Hire and Hirequip are both successful businesses and our strategy will maximise their combined value.”

“Hirequip is extending an offer of employment on substantially the same terms and conditions to all existing Ready Hire employees and is hopeful that all employees will opt to accept employment,” Mr McKinlay said.

Prior to this acquisition, the last 12 months have seen Hirequip invest $15.9m in plant and equipment including $1.6m spent bringing off balance sheet funded assets onto the balance sheet. Equipment sales amounted to $2.6m and depreciation financed a further $6.7m.

The branch network has also been upgraded with the refurbishment or building new facilities in Stoke, Wanaka, Central Wellington, New Plymouth, Mt Manganui and Mt Wellington. Further branch refurbishment and expansion is planned for the coming year. This level of investment demonstrates Hirequip’s commitment to the sector.
“From the time we first acquired an interest in Hirequip, we have signalled our intention to grow the business through the acquisition of other equipment hire companies and the development of related business activities,” Mr Wong said.

“Purchasing Ready Hire is consistent with that intention. 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.”

Hirequip also announced today that it had entered into a conditional contract to sell its 30 percent shareholding in the Northwood Supa Centa. Conditions in the contract are expected to be satisfied by mid January and when settled, the transaction will result in a profit of some $3.0m to Hirequip.

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