Neff Corp. has filed an initial public offering with the U.S. Securities & Exchange Commission for a target goal of raising $100 million. The 25-year-old, Miami-based company, which rents, leases and sells construction equipment through 64 branches across 15 states, filed the IPO on Sept. 3.
Company executives believe that Neff's focus on earthmoving equipment positions it to capitalize upon future growth, says the IPO prospectus, which also says an industry trend from owning to renting likely will continue as construction firms increasingly seek ways to lower overhead costs and reduce risk.
Neff did not disclose how many shares of common stock would be made available or target pricing. The 1,042-employee firm requested the ticker symbol NEFF but did not specify the exchange. Primary underwriters include Minneapolis-based Piper Jaffray, Charlotte, N.C.-based Wells Fargo Securities LLC and New York City-based Bank of America and Morgan Stanley. Neff plans to use its IPO proceeds to pay down an outstanding loan, scheduled to mature in 2021, as well as reimburse part of its revolving credit facility, which expires in late 2018, the prospectus explains.
The company previously, in 2006, tried to sell 6.7-million shares priced at $14 each on the New York Stock Exchange but withdrew the offering a year later, after New York City-based private-equity firm Lightyear Capital LLC bought the rental firm for $900 million. In 2010, Neff filed for Chapter 11 bankruptcy and, later that year, emerged with Minnesota-based Wayzata Investment Partners in control of the company. Graham Hood, 57, a former executive with Hertz Equipment Rental Corp., has served as Neff's president and CEO since 2007.
A significant player in the rental market, Neff booked an adjusted EDITDA of $167.4 million on $346.9 million in revenue for the most recent fiscal year, ending June 30, according to its filings. The company also notes that it took a net loss of $17.4 million for the second half of the year, with 87% of its revenue attributed to equipment rentals.
The firm’s 13,500-piece equipment fleet is concentrated in aerial work platforms and earthmoving machines, with a 45-month average age. Neff ranks as the nation’s 12th-largest equipment rental company, according to industry trade journal Rental Equipment Register. Neff currently has 13,000 active customers, divided between the infrastructure, commercial construction, municipal, residential and oil-gas markets.
The U.S. equipment rental market this year is predicted to reach $35.9 billion, up 7.7% from 2013, due to gains in the construction and industrial sectors, reports the American Rental Association, Moline, Ill.
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