Shippensburg, Pa.-based Volvo Rents, a wholly-owned subsidiary of the Volvo Group, recently broke into the Puerto Rico market through the acquisition of Casco Rentals in Toa Baja and Encar Rentals Inc. in Lajas.
The financial terms of the deals were not disclosed.
The purchased locations add to the company’s 70-store rental chain throughout the U.S. mainland that are dedicated to offering equipment for the construction, commercial and industrial markets, as well as an extensive line of Volvo compact excavators, compactors, wheel loaders, backhoe loaders, compaction equipment, and skid steer loaders.
The acquisition responds to a strategy Volvo Rents set off in April 2011 to run a franchise network of rental stores as well as its own locations. The decision seemingly set off a buying spree that just recently trickled down to Puerto Rico, marking the company’s first foray outside the U.S. mainland.
“Not only in the U.S., but on a global level there is an undergoing and unprecedented shift from buying equipment to renting,” Mike Crouch, vice president of business development for Volvo Rents, told Lift and Access, noting that construction equipment rental revenue grows an average of 7 percent annually. “This puts us in a very favorable position as we continue to expand our footprint in various global marketplaces.”
The company’s acquisition in Puerto Rico comes less than six months after it picked up the assets of Casco Rents in Florida, with locations in Tampa, Port St. Lucie and Pompano Beach. While Volvo Rents is banking on an expected surge in construction activity, it is also aware that builders are opting to rent rather than buy equipment, to avoid hefty investments.
“Contractors who may have purchased equipment in the past are more likely to rent today,” Crouch said. “Contractors are being financially prudent. They either don’t have access to capital, or if they do they are deciding that buying equipment isn’t the best use.”