Platinum Equity makes nearly 4x its money with BlueLine sale

Platinum Equity nearly quadrupled its money with the sale of BlueLine Rental after four years.

Last week, Platinum closed the sale of BlueLine to United Rentals Inc for about $2.1 billion.

BlueLine, Woodlands, Texas, is an equipment rental company that serves more than 50,000 customers in the construction and industrial sectors. Platinum made about 3.5x its investment with the sale, a source said.

The deal was noteworthy for Platinum. The Los Angeles buyout shop founded by Tom Gores acquired BlueLine in February 2014 for $1.1 billion. Platinum injected $201 million equity as part of the acquisition, IFR reported.

Just weeks later, also that February, BlueLine used $250 million in PIK toggle notes to pay out a $202 million dividend to Platinum. The deal caused a stir because of the speed with which Platinum recouped all the cash it put up for BlueLine.

BlueLine also had plans to go public. Vander Holding Corp, BlueLine’s parent, in June filed to go public confidentially. It did not disclose how many shares it would offer or their price range. BlueLine apparently called off those IPO plans when it opted to sell itself to United Rentals.

Founded in 1995, Platinum Equity specializes in complex carveouts of companies owned by Fortune 500 companies. It targets sectors including manufacturing, distribution, technology and media and entertainment.

The PE firm has been very active. Platinum is nearing a deal to buy Jostens, which makes memorabilia such as class rings and yearbooks, for about $1.3 billion from Newell Brands, Reuters reported Oct. 31.

Platinum struck a deal Nov. 1 to buy the water-care business of Lonza for $630 million. The firm also closed its $2.1 billion acquisition of LifeScan from Johnson & Johnson in October.

Platinum is expected to come to market with its fifth flagship this year, Buyouts reported in July, targeting at least $6.5 billion for Fund V.

That number could jump to as much as $8 billion, the story said. Platinum’s debut small-cap fund closed on $1.5 billion, also in July.

United Rentals and BlueLine could not immediately be reached for comment.

Action Item: Contact BlueLine CEO Asterios Satrazemis at +1 866-610-BLUE