Tokyo-based Sumitomo Corp. has invested $50 million in Sunstate Equipment Co. in a bid to expand its footprint in North America. The Phoenix-based rental company is a major supplier of construction equipment, with $227 million in annual revenue. Sumitomo, which also owns Link-Belt Construction Equipment Co., Lexington, Ky., says it has been looking to expand into the rental business. “Although the U.S. construction-equipment rental industry has been experiencing a severe downturn since the financial crisis, given the long-term growth prospects of this market, Sumitomo believes this is an excellent opportunity,” says the company.
The market is generally healthy and steadily growing, and margins are up for large specialty contractors. Further, advances in design tools and owner demand for collaboration are giving subcontractors a seat at the table early on in projects.