Firm Advises Platinum Equity in Nesco’s $1.48B Deal

December 4, 2020 — Hughes Hubbard is serving as legal counsel to U.S. private equity firm Platinum Equity in a strategic partnership with Nesco Holdings Inc. for the Fort Wayne, Ind.-based rental equipment provider’s pending acquisition of heavy equipment solutions provider Custom Truck One Source (CTOS).

Nesco announced on Dec. 3 a deal to buy Kansas City-based CTOS, a portfolio company of Blackstone Group Inc., for $1.475 billion to create a specialty rental equipment company. The deal is expected to close in the first quarter of 2021.

Platinum Equity, a majority owner of Nesco from 2011 to 2014, will invest over $850 million in Nesco in exchange for newly issued common stock at $5 per share. CTOS shareholders, including funds managed by Blackstone, will invest another $100 million.

“This is a powerful team of investors coming together to create value,” said Tom Gores, chairman and CEO of Platinum Equity. “We will deploy our industry knowledge and global operating expertise to maximize the potential of this investment.”

Nesco and CTOS are leading providers of specialized truck and heavy equipment solutions, including rental, sales and aftermarket parts and service. The combination will create a leading, one-stop-shop provider of specialty rental equipment serving highly attractive and growing infrastructure end-markets, including transmission and distribution, the 5G revolution build-out and critical rail and other national infrastructure initiatives.

The combined company will be based at the CTOS campus in Kansas City with significant operations maintained in Indiana. It will operate on a national scale with over 1,800 employees, 46 company-operated locations and a rental fleet that will be nearly double in size with almost 9,000 units. When the deal closes, Platinum Equity will own a 57 percent stake in the combined company.

Since its founding by Gore in 1995, Platinum Equity has completed over 250 acquisitions in a broad range of market sectors. Headquartered in Los Angeles, Platinum Equity has regional offices in Boston, Greenwich, Conn., New York, London and Singapore.

Ken Lefkowitz leads the HHR team, which also includes Alexander Rahn, Gary Simon, Freddie Goudie, M. Shams Billah, Andy Braiterman, Ryan Fayhee, Philip Giordano, Rita Haeusler, Jerry Harrison, Patrice Jean, Michael DeBernardis, Erin DeCecchis, Carol Remy, Justin Cohen, Tyler Grove, Ashley Hamilton, Andrew Herman, Kristin Millay, Robby Naoufal, Lynn Russo, Victor Sandoval, Arthur Souza-Rodrigues, Justin Taylor, Mariana Veiga and Barbara Champoux.