Penske mulling over what to do with Rentway assets

READING, Pa. (July 6, 2000) — It will be a while until U.S.-based Penske Truck Leasing determines what to do with newly acquired Rentway Ltd.’s identity, locations, and personnel after it bought the Mississauga, Ont.-based Trimac subsidiary earlier this week for $105 million.

“We’re entering a transition period leading up to the closing of the transaction on August 31, so weÕll be starting to answer those questions during the coming weeks,” said Louise Moyer of Penske Truck Leasing.

Trimac said it had sold the 10,000 truck, trailer and tractor fleet rental and lease subsidiary to Penske — which operates 142,000 heavy, medium and light-duty trucks from 460 locations across North America — in order to focus more on third party logistics and the bulk trucking business.

The company said it would be in a better position to pay off its $28 million debt and put $60 million towards Trimac Transportation Systems’ $200 million debt.

Trimac also hopes to maximize shareholder value by repurchasing $80 million worth of common shares at $9 per share.

“It’s not that we donÕt like the truck leasing business. We set high standards for that business in Canada. It just doesn’t fit the identity and mission we want to more firmly establish for Trimac, which is as a bulk-trucking and logistics operation in North America,” said the companyÕs chief financial officer Terry Owen.

“Furthermore, from a public-company standpoint, the Rentway debt was making it difficult for analysts to follow Trimac.”

Trimac first began to reconsider Rentway’s position within the company after a failed merger with Transervice Lease Corp. of Lake Success, N.Y., in 1999. Transervice is an 11,000-truck full-service leasing operation with more than 80 locations and 1100 employees across the U.S.

Trimac’s last big sell-off involved its Keating Energy Services contract drilling business in 1997.