Speedy Hire signs 'transformational' deal with HSS Hire subsidiary

(Sharecast News) - Tools and equipment hire group Speedy Hire has announced a "transformational" commercial agreement with HSS Hire's ProService which will see it take a minority stake in the building services marketplace. The hire and services supply agreement will see Speedy Asset Services (SASL) become the principal equipment supplier to ProService, estimated at £50m-55m in revenues per annum, as well as offer test, inspection and certification services to ProService customers.

SASL will also buy all HSS core equipment on hire to ProService customers, and acquire three HSS service centres to expand Speedy's network.

In return, ProService will act as fulfilment provider for all SASL requirements for its customers for the supply of rehire items and certain resale items, and provide industry-related training.

ProService will also issue Speedy with 79.4m of its shares, representing 9.99% of the post-subscription issued share capital of the company.

The deal, which has an initial five-year term extendable to eight, will see Speedy pay £35m from existing resources, which it expects to be paid back from operating cash flow within two to three years.

"This is a transformational agreement for Speedy, made possible by the progress of the group under our Velocity growth strategy," said Speedy's chief executive Dan Evans. "It will provide Speedy customers with greater choice and an enhanced service, while providing ProService customers the ability to indirectly access our national network, larger equipment fleet and faster delivery capability."

The agreement is expected to be "significantly accretive" to earnings and operating margin in the first full year post completion, and will see the creation of around 300 new Speedy jobs.