Business Context and Reporting Period
This Form 8-K, filed on March 5, 2021, by Nesco Holdings, Inc. (NSCO), reports management changes effective on the Closing Date of the acquisition of Custom Truck One Source, L.P. ("Custom Truck"). The transaction follows a Purchase and Sale Agreement dated December 3, 2020, involving affiliates of The Blackstone Group.
Key Financial Metrics and Related Transactions
The filing does not provide consolidated revenue, profit, cash flow, or debt metrics for Nesco Holdings. However, it discloses specific financial figures related to related-party transactions between Custom Truck and entities owned by the incoming CEO, Fred Ross, for the year ended December 31, 2020:
- Rent Expense: Approximately $0.4 million paid by Custom Truck to Ross Custom Properties, LLC.
- Equipment Rental Revenue: $1.5 million generated from rentals to R&M Equipment Rental.
- Equipment Sales Revenue: $13.8 million generated from sales of new and used equipment to R&M Equipment Rental.
- Service Revenue: $0.6 million generated from services performed for R&M Equipment Rental.
Supplemental Equity Financing: A private placement of 28,000,000 shares at $5.00 per share is expected to close on the Closing Date, generating aggregate proceeds of $140 million.
Material Changes: Management Appointments
Effective on the Closing Date, the Board of Directors approved the following changes:
- Chief Executive Officer: Lee Jacobson will cease to serve. Fred Ross (CEO of Custom Truck since 2015) will succeed him.
- President and Chief Operating Officer: Robert Blackadar (President) and Kevin Kapelke (COO) will cease to serve. Ryan McMonagle (COO of Custom Truck since 2017) will succeed them.
- Chief Financial Officer: Joshua Boone will cease to serve but will remain employed through December 31, 2021, to support integration. Bradley Meader (CFO of Custom Truck since 2018) will succeed him.
Outlook, Risks, and Contingencies
Forward-Looking Statements: The filing includes standard disclaimers regarding estimates and projections. Actual results may differ due to risks including:
- The impact of the COVID-19 pandemic on operations and the economy.
- The ability to complete the pending acquisition of Custom Truck and the related private placement.
- General economic and market conditions affecting demand.
Related Party Transactions: The Company will assume leases and agreements with entities owned by Fred Ross and his family. Additionally, Mr. Ross, Mr. McMonagle, and Mr. Meader have entered into subscription agreements to acquire shares at $5.00 per share and rollover agreements to exchange Custom Truck interests for Nesco common stock.
Investor Verification Checklist
- Confirm the official Closing Date of the Custom Truck acquisition.
- Verify the closing of the $140 million Supplemental Equity Financing.
- Review the full text of the Purchase and Sale Agreement for detailed terms of the acquisition.
- Monitor the integration progress and the continued employment of outgoing CFO Joshua Boone through year-end 2021.
- Assess the impact of the disclosed related-party transactions on future consolidated financial statements.