"After the Cerberus transaction, we went back to our core business," Kneeland says. "We saw the opportunity to grow within."

United was already the nation's largest rental company prior to the deal, RER says, with 8,600 employees in 550 locations in 48 states and 10 Canadian provinces. And RSC was no slouch, with $1.52 billion in revenue in 2011, or 23.3% more than in 2010. Together, the two firms would create a rental juggernaut with a 15% market share, which is three times the size of their next-closest competitors, Sunbelt and Hertz, says Coppola.

The United deal comes as contractors increasingly are looking to offload the heavy risk of managing fleets of equipment. According to a recent survey of the Associated General Contractors of America's members, roughly 66% of construction firms say they plan to lease equipment this year, while only 40% intend to buy new machines.

The rental market, consequently, captured a price increase of 8.9% in 2011, says J.P. Morgan analyst Ann Duignan, who believes an industry "renaissance" is under way. North America's equipment rentals will generate $33.5 billion in revenue in 2012, which is 6.9% higher than last year and more than three times the expected 2012 growth rate for the U.S. gross domestic product, reports the American Rental Association (ARA), a Moline, Ill.-based trade group.

As rental companies continue to consolidate, they cement changes in the equipment market's competitive landscape. One impact is the demise of the locally owned rental store. In acquiring more stores, companies like United gain stronger access to credit, buying power and negotiating leverage with suppliers and vendors, leaving little room from smaller-sized competitors, says Lawrence De Maria, who co-heads Chicago-based William Blair & Co.'s global industrial infrastructure group.

One example came around the same time the United-RSC deal was announced last year. Unlike United, Ahern Rentals Inc., the country's largest independent rental company, suffered through the downturn. With $620 million in debt, the company filed for Chapter 11 bankruptcy in December. The Las Vegas-based, family-owned company was originally due to file its reorganization plan this month but just recently asked the court for an extension until this summer. Meanwhile, Ahern is faced with a possible takeover bid from billionaire Tom Gores' Platinum Equity LLC, which also runs crane-rental giant Maxim Crane Works L.P.

Bankruptcy as an Exception

Unlike previous downturns when it was common for rental companies to write down debt under Chapter 11, bankruptcy is more the exception this time around. The downturn brought an economic boom for many rental companies, which proceeded cautiously into the recession, observers say. Year-end results are telling. Aggreko generated roughly $2 billion in revenue last year, a 14% increase over 2010, while H&E Equipment Services saw $720.6 million in total revenue, or 25.5% more annually. Hertz Equipment Rental took in $1.2 billion in revenue last year, a 13% gain. Sunbelt Rentals enjoyed over $1 billion in revenue for the nine-month period ending Jan. 31, a 20% increase over the same period a year earlier, and Essex Crane Rental Corp. experienced a 53.8% year-to-year boost, with nearly $59 million in rental revenue.

One way that rental firms weathered the storm was by allowing their fleets to age. The average rental-equipment age was 51.8 months in January, with high-reach forklifts being used the longest, at 4.32 years, reports Rouse Analytics, a Beverly Hills, Calif.-based benchmark service. Machines are now getting younger. Rental firms are gradually replacing their aging machines, fueling an uptick in sales that has buoyed manufacturers' earnings.

Companies like Sunbelt and Volvo see the United-RSC deal as an opportunity to pick up share by providing new machines, says Duignan, who adds, "A larger customer always results in pricing power."