Hirepool Completes National Growth Strategy

Hirepool Completes National Growth Strategy 6 Months Ahead Of Schedule & In Time For 50th Anniversary

Auckland, 14 April 2005: Equipment Rental Leader Hirepool Limited acquired five more branches this week, effectively completing its national roll-out strategy more than six months ahead of schedule.

The purchase of Hire Services Limited, a network of five rental branches in Invercargill, Queenstown, Gore, Cromwell and Te Anau, brings Hirepool’s nationwide network of business units to 43.

The Hire Services deal, which takes effect on May 1, comes at a historic time for Hirepool, which celebrated its 50th Anniversary with a gala dinner in Auckland tonight, attended by Prime Minister Helen Clark.

Hirepool Managing Director Tenby Powell says the acquisition of the five southern businesses “involved months of planning and now gives us strong penetration into a region long dominated by a rival competitor. Of greater significance, it sees us complete our national growth strategy more than six months ahead of schedule.”

When Powell acquired a stake in Hirepool from Owens Group back in July 2003 as part of a consortium led by Goldman Sachs JB Were, with Owens (now Mainfreight Limited) retaining a share, the business had 14 branches - 10 of these from Hamilton north and only one in the South Island.

At that stage an aggressive growth strategy was implemented to establish Hirepool as New Zealand’s recognised rental equipment leader within two years. This was predicated around Hirepool gaining critical mass through the purchase of Ready Hire, a strong North island chain. When Hirequip outbid Hirepool for that business, the national roll-out was put back to December 2005.

What Hirepool has achieved over the last 20 months, either by acquisition or greenfield development, has seen it take a stranglehold across the North Island and a major footprint into the South Island, where it now has 13 branches, compared with only one this time two years ago. It has also diversified its holdings with the additional purchases of the Port-a-loo businesses in Auckland, Wellington and Marlborough.

“The acquisition of Hire Services gives us five well-managed business units and creates a strong centre of gravity in the Otago and Southland regions which, means we can go to the market with a national network,” he says. “This is significant for the industry in that customers now have a choice between two major players.

“Having now achieved the national coverage we set to accomplish, we can consolidate the business gains made, develop our branches at regional level and strengthen alliances with key suppliers to support our growing commercial and DIY markets.”

Powell stresses that a focus on consolidation for the remainder of 2005 doesn’t signal a change of philosophy away from growth. Far from it.

“We believe there is still potential for a lot more growth in the rental offering, particularly as a greater number of companies involved in the construction, roading and rural sectors now accept that locking up capital in expensive equipment is not the best use of funds,” he says. “The economics of plant ownership no longer make good strategic or business sense for many of them.”

“With our re-branding in place, and receiving positive feedback from the marketplace, we will also continue to ensure our branches create a customer-friendly environment for the growing DIY market.”

Hirepool has also marked its 50th year in business with a major initiative to support its key commercial customer base by signing up as the principal sponsor of the New Zealand Contractor’s Federation for a substantial six-figure sum.

“We certainly have a lot to celebrate, but even more to look forward to.”

ENDS

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