By FRANK SWERTLOW
Richard Colburn, featured by the Business Journal last week as one of the 50 richest people in Los Angeles, is about to get richer.
By agreeing last week to sell his equipment leasing business, U.S. Rentals Inc., to United Rentals Inc. for $1 billion in stock, the 86-year-old Beverly Hills resident will see his personal fortune rise by more than $45 million.
That may sound like a lot, but based on the Business Journal estimates, it represents a mere 6 percent bump for Colburn, whose personal net worth before the deal was estimated at $750 million.
Colburn, who will become chairman emeritus of the post-merger United Rentals Inc., was out of the country and unavailable for comment last week, according to Howard Kalt, a U.S. Rentals spokesman.
Colburn owns 20.7 million shares, or 67.5 percent of U.S. Rentals’ total. At the market close on June 16, the day the deal was announced, Colburn’s stake in U.S. Rentals was worth $695 million.
Under the buyout deal, each share of U.S. Rentals will be exchanged for 0.9625 of a share of United Rentals. The June 16 closing price of United Rentals was $37.75 a share, making Colburn’s equity in the new company worth about $741.8 million.
Kalt said all of Colburn’s investment in U.S. Rentals has been earmarked for the Colburn School for Performing Arts in downtown. An official at the school last week said any comments about its pending windfall from Colburn would be premature and “inappropriate.”
Colburn started out to become a professional musician, even playing in the San Diego Symphony’s inaugural performance in 1927 as a teenager. But when his music teacher told him he would never reach the top ranks, he relegated his music to a hobby.
After dropping out of college and working for an investment bank for a while, Colburn bought a few electrical utilities and foundries, with backing from the investment bank. He next started his own business as a construction equipment distributor.
He bought a struggling equipment leasing company, Modesto-based Leasing Enterprises Inc., in 1975 and renamed it U.S. Rentals. He built the company over two decades and then sold about one-third of its equity through an initial public offering in February 1997. Colburn retained his 67.5 percent stake until agreeing to the stock swap deal last week.
As for his music, Colburn has played with several local orchestras over the years and co-founded the Los Angeles Chamber Orchestra. He also owns a collection of rare Stradivarius violins.
The $1.2 billion deal will make Greenwich, Conn.-based United Rentals the largest equipment rental company in the United States. The combined company will rent backhoes, forklifts, hand tools, tables, chairs and other items at 296 sites in 33 states, Canada and Mexico, generating annual sales of about $1.4 billion. United Rentals officials say they expect no antitrust problems for the deal, which is subject to approval by regulators.