Finning International Inc.'s (TSX:FTT) U.K. subsidiary, Hewden Stuart plc, has sold its tool rental business to a U.K. competitor Speedy Hire plc for $245 million.
The purchase price includes Hewden's 188 tool rental locations in the U.K., but excludes property owned by Hewden valued at between $53 million and $64 million.
The sale is part of Finning's move to concentrate on its heavy equipment and Caterpillar equipment rental business. Hewden will focus its business on renting its more than 6,000 Caterpillar machines and other construction equipment machinery.
The deal, which is still subject to completion of various conditions, is expected to close July 31.
The Hewden deal is Finning's second large asset sale in the U.K. in the past year. It follows Finning's sale of its material handling division to Sammons Enterprises last September for $175 million.
Finning will take a short-term earnings hit as a result of the deal. That will push Finning's earnings to the lower end of its guidance range of between $1.48 and $1.60 per share.
Finning's share price range during the past week: between $30 and $30.68; 52-week high: $32.62; 52-week low: $17.88.