Finning sell Hewden rental business

FINNING International Inc. have announced that Hewden, their loss-making UK equipment rental business, has been sold to private equity group Sun European Partners LLP, the European advisers to US-based Sun Capital Partners Inc., for £110.2 million.

The sale, which was completed yesterday (5 May) for a consideration comprising £90.2 million in cash, an interest bearing five-year loan note worth £20 million, and a 5% equity warrant subject to certain conditions being met, concludes the disposal of the Hewden Stuart business acquired by Finning in 2001.

Commenting on the sale, Mike Waites, president and chief executive officer of Finning International Inc, said: ‘After a comprehensive review, we have determined that, for strategic and financial reasons, it is in our shareholders’ best interest to divest Hewden.

‘While we believe that Hewden’s broad product offering combined with our recent restructuring and national accounts focus will serve it well in the future, owning a large, short-term rental business operating separately from our UK dealership does not align with our strategic objectives.’

Hewden currently cover 63 locations in the UK and have 1,300 employees. The company’s existing commercial centre in Manchester is proposed to be the new head office for Hewden.

Cannock-based Finning UK, who have agreed to provide transitional services to Hewden, will continue to operate from 20 branches in the UK with 1,470 employees serving Caterpillar dealership customers across the country.

Andy Fraser, managing director of Finning UK, said: ‘Going forward, Finning’s UK dealership will continue to work closely with our plant hire customers to place Caterpillar equipment into the UK equipment rental market. We are confident we can demonstrate the value of Finning to Hewden’s new owners and maintain a productive commercial relationship with Hewden.’

Finning say they will use the proceeds from the sale of Hewden primarily to reduce debt.