Acquisitions

12 Months Ended

Dec. 31, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

On March 15, 2024, we completed the acquisition of Yak Access, LLC, Yak Mat, LLC and New South Access & Environmental Solutions, LLC (collectively, “Yak”). Yak was a leader in the North American matting industry with a fleet of approximately 600,000 hardwood, softwood, and composite mats that provide surface protection across both construction and maintenance, repair and operations (“MRO”) applications, and served customers primarily in the industrial sector across over 40 states. The acquisition:

• Provided entry into the matting market via an industry leader with established scale across fleet, operations, and talent;

• Augmented exposure to the energy and power verticals, where significant investment is expected over the next several decades; and

• Enhanced our one-stop-shop value proposition with immediate cross-selling opportunities to existing and new construction and MRO customers.

The acquisition date fair value of the purchase price to acquire Yak was $1.158 billion, comprised of cash and $41 of estimated contingent consideration ($50 is the maximum amount of contingent consideration) that could become payable to the seller based on revenue attainment in the first two years after closing. The acquisition and related fees and expenses were funded through the issuance of $1.100 billion principal amount of 6 1/8 Senior Notes (see note 12 to the consolidated financial statements for further information) and drawings on our senior secured asset-based revolving credit facility (“ABL facility”).

The table below summarizes the fair values of the assets acquired and liabilities assumed. The purchase price allocations for these assets and liabilities are based on preliminary valuations and are subject to change as we obtain additional information during the acquisition measurement period, although we do not expect material future changes.



Accounts receivable (1)	$	99
Inventory	8

Rental equipment	127
Property and equipment	28
Intangible assets (customer relationships) (2)	150
Operating lease right-of-use assets	4
Other assets	18
Total identifiable assets acquired	434

Accounts payable, accrued expenses and other liabilities	(100)

Operating lease liabilities	(4)

Total liabilities assumed	(104)
Net identifiable assets acquired	330
Goodwill (3)	828
Net assets acquired	$	1,158

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(1)The estimated fair value of accounts receivables acquired was $99, and the gross contractual amount was $102. We estimated that $3 would be uncollectible.

(2)The customer relationships are being amortized over a 6 year life.

(3)All of the goodwill was assigned to our specialty segment. As noted above, we have not yet obtained all the information required to finalize the valuations of the assets acquired and liabilities assumed. As such, goodwill could change from the amount noted above, although we do not expect material future changes. Once finalized, we expect that the goodwill that results from the acquisition will be primarily reflective of Yak's going-concern value, the value of Yak's assembled workforce and new customer relationships expected to arise from the acquisition. All of the goodwill is expected to be deductible for income tax purposes (because the acquired Yak entities were sold as disregarded entities, the acquisition was treated as an asset purchase for income tax purposes, which resulted in the goodwill that is deductible for income tax purposes equaling the total acquired goodwill).

The debt issuance costs associated with the issuance of debt to partially fund the acquisition are reflected, net of amortization subsequent to the acquisition date, in long-term debt in our consolidated balance sheets. The total post-acquisition revenue attributable to the acquired Yak locations was $322 for the year ended December 31, 2024. It is not practicable to reasonably estimate the amount of earnings of Yak since the acquisition date, primarily due to our corporate structure and the allocation of corporate costs.

Pro forma financial information

The pro forma information below gives effect to the Yak acquisition as if it had been completed on January 1, 2023. The pro forma information is not necessarily indicative of our results had the acquisition been completed on the above date, nor is it necessarily indicative of our future results. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisition and also does not reflect additional revenue opportunities following the acquisition. The pro forma information includes adjustments to record the acquired assets and liabilities of Yak at their respective fair values and to give effect to the financing for the acquisition. The pro forma adjustments reflected in the table below are subject to change as additional analysis is performed. The purchase price allocations for the assets acquired and liabilities assumed are based on preliminary valuations and are subject to change as we obtain additional information during the acquisition measurement period, although we do not expect material future changes. Increases or decreases in the estimated fair values of the net assets acquired may impact our statements of income in future periods. The table below presents unaudited pro forma consolidated income statement information as if Yak had been included in our consolidated results for the entire periods reflected:


	Year Ended
	December 31,
	2024		2023
United Rentals historic revenues (1)	$	15,345	$	14,332
Yak historic revenues (2)	97		353
Pro forma revenues (1)	15,442		14,685
United Rentals historic pretax income	3,388		3,211
Yak historic pretax income	10		54
Combined pretax income	3,398		3,265
Pro forma adjustments to combined pretax income:
Impact of fair value mark-ups/useful life changes on depreciation (3)	1		6

Intangible asset amortization (4)	1		(19)

Interest expense (5)	(14)		(69)
Elimination of historic interest (6)	11		66

Elimination of refinancing transactions (7)	(40)		(101)
Transaction bonuses and other (8)	22		3



Pro forma pretax income	$	3,379	$	3,151

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(1)United Rentals historic revenue for the year ended December 31, 2024 includes the post-acquisition revenue attributable to the acquired Yak locations of $322 that is discussed above. Pro forma revenue for the year ended December 31, 2024 includes $419 of pre/post-acquisition revenue from the acquired Yak locations, comprised of $97 of historic Yak revenue and $322 of post-acquisition revenue attributable to the acquired Yak locations.

(2)Yak revenue reflects only the historical results of the entities being acquired, and includes an estimate of revenue from mat rentals to a commonly controlled entity that were eliminated in consolidation by Yak.

(3)Depreciation of rental equipment and non-rental depreciation were adjusted for the fair value mark-ups of the equipment acquired in the Yak acquisition. There were no material changes to the useful lives and salvage values of the acquired equipment.

(4)Intangible asset amortization was adjusted to include amortization of the acquired intangible assets.

(5)As discussed above, the acquisition and related fees and expenses were funded through the issuance of senior notes and drawings on our ABL facility. Interest expense was adjusted to reflect interest on the debt used to finance the acquisition.

(6)Historic interest on debt that is not part of the combined entity was eliminated.

(7)Reflects gains on the extinguishment of debt, net of refinancing transaction expenses.

(8)Primarily reflects bonuses paid in connection with the acquisition.

In addition to the Yak acquisition, during 2024 and 2023, we completed a series of acquisitions which were not significant individually or in the aggregate. In 2022, we completed the acquisition of assets of Ahern Rentals, Inc. (“Ahern Rentals”), which was accounted for as a business combination. Disclosures addressing the Ahern Rentals acquisition were included in our Annual Report on Form 10-K for the year ended December 31, 2023. See the consolidated statements of cash flows for the total cash outflow for purchases of other companies, net of cash acquired, which includes Yak, Ahern Rentals and the other completed acquisitions, and see note 9 to our consolidated financial statements for rollforwards showing the goodwill acquired associated with these acquisitions.