Nesco Holdings to Acquire Custom Truck One Source

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Nesco Holdings recently announced that it has entered into an agreement to acquire Custom Truck One Source for a purchase price of $1.475 billion. Nesco and Custom Truck One Source are leading providers of specialized truck and heavy equipment solutions including rental, sales and aftermarket parts and service.

The combination will create a leading, one-stop-shop provider of specialty rental equipment serving growing infrastructure end-markets. With complementary business lines, customer bases and capabilities, the combination is expected to yield significant benefits from increased scale, breadth of product and service offerings, and expanded geographic coverage.  

In connection with the transaction, an affiliate of Platinum Equity has committed to invest over $850 million into Nesco in exchange for newly issued common stock. In addition, existing Custom Truck One Source shareholders, including certain funds managed by The Blackstone Group, in its capacity as the current majority owner of Custom Truck One Source, and certain members of the Custom Truck One Source management team, are expected to invest approximately $100 million into Nesco in exchange for newly issued common stock. Energy Capital Partners and Capitol Investment, who together currently own about 70% of Nesco’s outstanding common stock, will retain their entire ownership positions in Nesco and have entered into voting agreements in support of the transaction. 

“Since Capitol’s investment in Nesco last year, our No. 1 strategic priority has been to find a way to bring these two companies together, given the significant value inherent in the combination. With enhanced scale, a broader set of capabilities and vastly improved financial flexibility, we believe the new company will be distinctively well-positioned to take advantage of the anticipated growth in critical U.S. infrastructure efforts in energy, telecom and rail over the near term and beyond,” says Mark Ein, chairman and CEO of Capitol and vice chairman of Nesco. “We are very pleased to partner with Platinum given its deep knowledge and strong track record in the equipment rental industry, as well as the existing Custom Truck One Source shareholders led by Blackstone. Together with Platinum and our other co-investors and the combined companies’ board and management team, we look forward to capturing the meaningful upside opportunities that lie ahead.”

Platinum Equity was previously the majority owner of Nesco from 2011 to 2014, and has been a longtime, successful investor in a wide range of specialty rental businesses. 

“This is a powerful team of investors coming together to create value,” says Tom Gores, chairman and CEO of Platinum Equity. “We will deploy our industry knowledge and global operating expertise to maximize the potential of this investment.”

“We know these companies and the industry extremely well and we have a well-defined playbook for creating value in this space,” says Louis Samson, partner at Platinum Equity. “We also have a deep bench of operations professionals specialized in merger integration and business transformation who will help bring Nesco and Custom Truck One Source together, building on the best attributes of each. We expect the combination will create a compelling industrial growth company with strong fundamentals and multiple ways to drive earnings organically or through additional mergers and acquisitions.”

“We are excited to bring together our complementary companies to provide a full range of solutions to our customers,” says Fred Ross, CEO of Custom Truck One Source. “I want to thank our dedicated employees for all that they do each day. Looking ahead, as a combined company, we will be very well-positioned to capitalize on a broad range of growth opportunities and better serve our customers' specialty rental equipment needs on a national basis. We look forward to working together with the Nesco team to realize substantial synergies that will create meaningful value for all our stakeholders.”

“This combination will create new opportunities for our company, our employees and the customers we serve,” says Lee Jacobson, CEO of Nesco. “Nesco and Custom Truck One Source are a perfect fit and together will be well-positioned to pursue numerous opportunities in the rapidly growing specialty rental segment. We couldn’t have reached this milestone without the hard work of our team, and we look forward to working together with Custom Truck One Source to ensure a seamless transition.”

The combined companies will offer customers a full suite of solutions across the specialty rental equipment value chain, including equipment rental, new sales, used sales, aftermarket parts and service and retail parts, tools and accessories. It will operate on a national scale with over 1,800 employees, 46 company-operated locations and a rental fleet that will be nearly double in size with almost 9,000 units and more than $1.3 billion in combined original equipment cost.

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