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DLJ spinout buys NES Rentals for $850m

Diamond Castle Holdings continues to invest its first fund with the purchase of a Chicago-based equipment leasing company.

Diamond Castle Holdings, which spun out of DLJ Merchant Banking in 2004, has agreed to purchase industrial equipment leasing company NES rentals for about $850 million (€667 million), including the assumption of certain liabilities. Diamond Castle will pay about $397 million in cash.

NES Rentals rents specialty and general equipment to construction and industrial companies. It rents about 750 types of equipment, and distributes new equipment for equipment manufacturers. The takeover price of the company, which emerged from bankruptcy in 2004, was $18.75 per share in cash, below the company’s closing stock price on Wednesday, when the deal was announced. However the share price still marked a 42 percent premium to the stock price in January when the company announced it was considering a sale or merger.

Diamond Capital was formed in 2004 when Lawrence Schloss left Credit Suisse First Boston’s buyout arm DLJ Merchant Banking. The former DLJ chairman brought Michael Ranger, David Wittells, Andrew Rush and Ari Benacarraf with him to the new firm. The firm’s debut fund, Diamond Castle IV, is seeking $2.5 billion according to SEC documents, and the firm has set a minimum investment of $10 million. The firm is focusing on investments in the power, financial services, media and telecom, healthcare and industrial sectors.