Three major Wall Street investors — Fortress Investment Group, Ares Management Corp. and Blackstone — are set to get completely wiped out on a deal for a portable toilet company put together by Platinum Equity.
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The trio is set to lose a combined $1.4B on United Site Services as Platinum gets ready to turn over control of the company to lenders, sources told Bloomberg. Fortress, Ares and Blackstone were some of the anchor investors in a financial vehicle Platinum created in 2021 to purchase USS from another one of its funds.
The deal valued the company at $4B, with investors in the former fund cashing out about $2.6B. The new investors placed a bet on the toilet company, which was the fund's sole asset.
The company wasn't able to capitalize on hopes that an uptick in in-person events following the pandemic would boost its business. USS struggled to grapple with a high-interest-rate environment, which slowed overall construction and impacted the company's debt servicing costs.
Platinum hasn't finalized its decision on the path forward for USS, and it's possible it doesn't give the company back to lenders, Bloomberg reported. Platinum currently has a forbearance agreement with those lenders, which is scheduled to expire in early December.
Platinum Equity Partner Louis Samson had high hopes for the deal and said in a 2021 release, “This transaction provides the best of both worlds: a chance to monetize the value we have created over the past four years, while providing new and existing investors the opportunity for additional returns on the next stage of the company’s growth."
USS has served more than 9,000 commercial construction customers across over 49,000 sites in more than 30 states, according to the company's website. The average cost nationally to rent a restroom trailer with two stalls is about $3,400 every four weeks for longer construction projects.
The global portable toilet rental market remains highly competitive, with a study published by Grand View Research reporting that it was worth an estimated $20.7B in 2023 and projected to reach $34.9B by 2030.
Portable toilet proponents point to increased worker productivity on construction sites, easier health and safety compliance, and mobility and flexibility across the site.
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