Born into the business, the younger Ahern received an accounting degree from Brigham Young University in Provo, Utah, before returning home to work for the family. He wanted to rent larger machines such as forklifts and telehandlers; his dad did not. Don Ahern launched Los Arcos Equipment in 1978, later buying the family business, Ahern Rentals, in 1990. The two companies merged three years later. Ahern Rentals remains family owned and run. Older brother, John "Paul" Ahern Jr., a licensed architect, owns a 3% stake. Don's son, Evan B. Ahern, is company president.
"Evan grew up in the business, and his skills helped take us into the computer age," says Ahern. "His software management concepts are widely used throughout the equipment rental industry."
Ahern Rentals cultivated customer loyalty with responsive service and a diverse equipment inventory that includes backhoes, skid steers, skiploaders, trenchers, compressors, generators, light towers, welders, hand tools and landscaping machines. The firm became a one-stop solution for workplace needs, growing and expanding into new regions while maintaining strong relationships with manufacturers JLG, Genie, Skyjack, Multiquip, Snorkel and Kubota, among others.
Ahern Rentals saw its annual earnings before interest, taxes, depreciation and amortization (EBITDA) skyrocket 87% between 2005 and 2008, reaching $150.1 million. Buoyed by the building frenzy, Ahern spent $370.2 million on equipment purchases between 2007 and 2008, according to court filings.
The company was the exclusive equipment provider for MGM Resorts' and Dubai World's $8.5-billion CityCenter development on the south Las Vegas Strip, supplying 6,000 pieces of machinery with guaranteed 24/7 maintenance and service. The 18-million-sq-ft, mixed-use project broke ground during the peak of the real estate boom in 2006 but ended during a deep recession in 2009, leaving Ahern Rentals with a glut of unused machines amid scant demand.
Spiral Into Bankruptcy
The company addressed the economic downturn by cutting worker benefits, renegotiating vendor prices, reducing overhead costs and scaling back senior management bonuses and commissions. Additionally, Ahern employed a risky business strategy by opening 24 new branches between 2009 and 2011 throughout the South and East Coast to redeploy leftover rental pieces from CityCenter. The counterintuitive move, done during construction spending cutbacks, put an underutilized fleet to work so it could generate cash.
"The hard cost to open a new branch and get it running is immense," Guy Ramsey, publisher of Lift and Access, an equipment trade magazine, told ENR in 2012. "It takes a minimum of six to eight months—if you're lucky—to generate any positive cash flow. Ahern didn't have enough time for those branches to mature."
With more than 37,000 pieces of equipment in inventory, Ahern's debt swelled to $620 million, resulting in a voluntary Chapter 11 filing in December 2011 that proposed repaying loans at less than face value while still keeping ownership intact. But the plan ran contrary to basic bankruptcy law.
Platinum Equity, which has acquired more than 145 companies since 1995, filed its own plan to snatch control of the company as repayment of debt. But Ahern drew out the bankruptcy process, gambling that the market would recover enough to acquire a new line of working capital. That enabled full debt repayment and preserved the family business.