(January 15, 2013) - Sumitomo Corporation (Head Office: Chuo-ku, Tokyo; President and CEO: Kuniharu Nakamura; hereinafter, "Sumitomo"), through its 100 percent subsidiary, SMS International Corporation, has acquired controlling interest of Sunstate Equipment Co., LLC (Head office: Phoenix, Arizona; Chairman;Michael Watts; hereinafter, "Sunstate") by increasing its ownership of Common Membership Interest to 80 percent. Sunstate is one of the major equipment rental companies in the United States, with branch locations in nine states primarily in the southwestern US.
Sumitomo made the original investment in Sunstate's Convertible Preferred Interest in 2009 at the time when the US construction equipment rental industry was undergoing a severe downturn that started after the financial crisis, because Sumitomo was convinced that industry was poised for a the long-term growth. Since the investment, Sumitomo has focused on strengthening the partnership with Sunstate's management team while gaining deeper understanding of the industry. In April of last year, Sumitomo converted the Convertible Preferred Interest to Common Membership Interest after observing the solid recovery trend of the industry.
Sumitomo believes that now is the opportune time to further grow Sunstate's business because US equipment rental industry still fragmented today and the industry is expected to grow due to continued increase in the rental penetration. It is with this belief that Sumitomo made the decision to acquire the controlling interest of Sunstate.
Sumitomo currently operates construction equipment dealerships in North America with annual turnover of approximately [JPY 150 billion]. Sumitomo also has an existing equipment rental business in Canada. Through this investment in Sunstate, Sumitomo is determined to expand its equipment rental business portfolio and become a leading company in the North American equipment rental market.
