Deutsche Bank and Citigroup are set to launch syndication of a $2.83 billion deal for the buyout of RSC Equipment Rental by Ripplewood and Oak Hill Capital. The deal, scheduled to launch today, comprises a $1.3 billion asset-based revolver, a $400 million asset-based term loan and a $1.13 billion second-lien term loan. There is also $620 million in senior notes and a $585 million injection of equity from Ripplewood and Oak Hill. Price talk is LIBOR plus 1 3/4% on the ABL revolver and term loan, according to an investor. Pricing on the second lien could not be determined.
The company's current sponsor, Stockholm, Sweden-based Atlas Copco, announced Oct. 6 that it would sell the majority stake of RSC to Ripplewood and Oak Hill for approximately $3.4 billion. Atlas Copco began exploring the possibility of divestiture of the company in February. RSC's business structure is very different from Atlas Copco's other three businesses and the hoped for synergies weren't as strong as the company would have liked, an RSC spokesman said. He commented that RSC has excelled while owned by Atlas and now is a good time to sell. Calls to Keith Sawottke, cfo, were referred to the spokesman. Atlas Copco will retain a 14.5% stake in the Scottsdale, Arizona-based company after the transaction. An Atlas Copco spokeswoman could not be reached.