Mills buys into heavy equipment rentals
By Euan Youdale21 July 2022
Brazil-based rental company Mills has entered the heavy equipment rental market with the acquisition of Triengel Locações e Serviços (Triengel).
In addition, Mills has committed to investing a further R$225 million (€40.7 million) in earthmoving equipment over the rest of this year and the first quarter of 2023.
Founded in 2020, following the merger of earthmoving specialists Triex Locação de Serviços Portuários and Hengel Locações e Serviços.
Triengel’s fleet comprises 245 machines with an average age of two years, including wheeled loaders, compaction rollers, skid steers and backhoe loaders.
The company has a strong presence in the agriculture and port services sectors, with a range of long-term contracts and operates from depots in Assis and São Paulo.
Mills is acquiring Triengel - through its subsidiary Solaris - for R$ 133.7 million (€24 million), including R$ 43.7 million (€7.9 million) of debt and a separate finance agreement for 27 new machines.
Mills said Triengel is well respected in the sector with strong service and maintenance, as well as high residual values of its assets. The company achieved revenues of R$ 56.4 million (€10 million) and EBITDA profits of R$ 28.0 million (€5 million) in the financial ending March 2022.
Mills said, “We believe that Triengel will add enormous expertise to Mills as it retains top executives who have more than 20 years of experience in the sector. Additionally, Triengel has maintenance systems which are customised for its product line that will allow the business to rapidly scale.”
The acquisition is in line with Mills’ growth strategy, including the expansion into heavy equipment rentals, which it describes as the Yellow Line (YL) market. “This move accelerates Mills’ entry into the YL equipment market, as a medium player in this sector and paving the way for significant organic and inorganic growth, in addition to the differentiated know-how in the sectors in which it operates.”
Mills says the earthmoving equipment rental market in Brazil grosses R$25 billion (€4.5 billion) per year, yet it is an under-penetrated market with significant growth in the last years and opportunities for consolidation and growth in the future.
Mills added that it plans to end the year with more than 50 branches, serving customers in some 1,400 cities across Brazil.