Cramo and Ramirent have received approval from the competition authorities and successfully closed the transaction to form a joint venture operating under the brand name “Fortrent” in Russia and Ukraine.
Fortrent is a leading equipment rental services company in the Russian and Ukrainian markets with annual sales of over EUR 52 million and an EBITDA margin of circa 35% in 2012. The combined entity has approximately 400 employees and 22 own rental depots. Its operational head office will be in Saint Petersburg.
“Launching the new company represents an important milestone,” says Anton Artemiev, chairman of the board. “The name Fortrent reflects the strengths of the player that is created by this transaction and the capabilities it has to present a full range of products and services to companies in the construction sector. Fortrent will offer a compelling value proposition for its customers and take the lead in further developing professional equipment rental in these markets.”
“Through Fortrent we have a strong role as the leading equipment rental company in the vast and growing Russian and Ukrainian markets. The partnership with Ramirent increases the investment capacity and growth opportunities for Fortrent while balancing the risks involved”, says Mr Vesa Koivula, CEO and President, Cramo Group.
The Chairman of the Board of Directors is Mr Anton Artemiev, who has extensive Russian and international business experience. Mr Grigory Grif has been appointed General Director of Fortrent (previously Country Manager, Ramirent Russia and Ukraine).
Fortrent, owned and controlled 50/50 by the two companies, has been created as a Finnish limited liability company. To reach equal ownership, Cramo pays to Ramirent a cash contribution of approximately EUR 9.2 million in connection with the closing of the transaction.
The share of the profit of the joint venture will be booked in the consolidated Group profit and loss statement above EBITDA using the equity method of accounting.
Cramo will recognise a non-recurring loss (including non-recurring transaction costs) of approximately EUR 2 million from the transaction in its Q1/2013 result.