U.S. Machinery & Construction: Rental Location Density Highlights Positioning in the Industry

Research evidence excerpt

U.S. Machinery & Construction: Rental Location Density Highlights Positioning in the Industry

Barclays | U.S. Machinery & Construction

would also note that much of EQPT’s locations in our dataset offer Gen-Rent with a (limited)

selection of specialty. EQPT’s avg distance to competition of ~17.7 miles is the lowest across our

dataset (Figure 1) and suggests EQPT has intentionally positioned in markets where rental

demand has already been proven by incumbents (URI/HRI/SUNB). EQPT’s playbook of rolling

out full-service locations simplifies market entry as it looks to aggressively expand, and enable

cross-sell opportunities, but incumbents have clearly seen the advantages of having dedicated

specialty locations also. The "Gen-Rent" first view matches our conversations with incumbents

who note that rate pressure has largely been isolated to the Gen-Rent space. We would also

note that sample only covers ~300 locations and given EQPT's rapid expansion (EQPT lists 385

locations on their website) values may have changed.

CAT’s footprint also looks structurally different vs traditional rental players. There's

increasing conversation about CAT's efforts in rental and what it may mean for the

incumbent aerials folks. Our data says there's a pivot from their footprint today that'd

need to be done to reflect incumbents but we do think they have the relationships to

succeed if dealers took rental seriously. We used a sample of ~650 CAT general rental

locations (including CAT Rental and Heavy Rentals). These locations are on average ~37.2 miles

from the competition, which is the furthest in our sample. This distance vs rental supports our

view that CAT's dealer network isn't as much competing directly with incumbents and losing