(Reuters) – Nesco Holdings Inc said on Thursday it would buy heavy equipment solutions provider Custom Truck One Source (CTOS) for $1.48 billion to create a specialty rental equipment company.
Nesco and CTOS both provide specialized truck and heavy equipment solutions including rental, sales and aftermarket parts and service.
The two companies expect about $50 million in annual cost savings within two years of deal closure.
U.S. private equity firm Platinum Equity will invest over $850 million in Nesco, of which it was the majority owner from 2011 to 2014, in exchange for newly issued common stock at $5 per share, the rental equipment provider said.
CTOS shareholders, including certain funds managed by Blackstone Group Inc, are also expected to invest about $100 million in Nesco in exchange for common stock.
After the deal closes, Platinum is expected to own about 57% of Nesco’s common stock, with existing CTOS shareholders owning about 7%.
Reporting by Shreyasee Raj; Editing by Krishna Chandra Eluri