BlueLine to pay Platinum, shareholders dividend shortly after $1.1 bln sale

blueline

Platinum Equity appears to be getting some of its equity back just weeks after buying BlueLine Rental in a $1.1 billion deal.

The former Volvo Rents is issuing $250 million in PIK toggle notes, according to IFR, a Thomson Reuters company. (peHUB is also owned by Thomson Reuters.)

The $250 million is being used to fund a special dividend and to repay company debt, IFR said. Bank of America, Goldman Sachs, Morgan Stanley, and Barclays are leading the deal, the story said.

Shippensburg, Pa.-based BlueLine provides small to medium-sized construction rental equipment like backhoe and skid steer loaders, compact wheel loaders and compact excavators. The company is expected to produce over $700 million in annual revenue, Moody’s Investors Service said.

In December, Volvo Groups agreed to sell Volvo Rents to Platinum Equity in a $1.1 billion deal. The deal closed Feb. 3. Four days later Volvo Rents said it was changing its name to BlueLine.

It’s not clear how big the BlueLine dividend is or how much of the company Platinum Equity owns. IFR is reporting that Platinum Equity injected $201 million equity as part of its BlueLine buy.

Founded in 1995, Platinum Equity is the Los Angeles private equity firm led by Tom Gores. The firm invests in sectors including information technology, logistics as well as manufacturing and distribution.

Platinum Equity collected $3.75 billion with its third fund in September. The firm’s prior fund raised $2.75 billion in 2008, while Platinum Equity’s first pool came in at $700 million in 2004. Fund II generated a 9.1 percent net IRR as of January 2012, while the first fund produced a 62.8 percent net IRR as of the same date, the Pennsylvania Public School Employees’ Retirement System said.

Officials for Platinum Equity and BlueLine did not return calls for comment.

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