SCHEDULE 13D/A: Platinum Equity Boosts Stake in Custom Truck One Source to Nearly 70%, Signaling Potential Strategic Moves

Platinum Equity, through its affiliate PE One Source Holdings, LLC, has significantly increased its beneficial ownership in Custom Truck One Source, Inc. to 69.6% of outstanding common stock, indicating a potential for future extraordinary corporate transactions.

Summary

• PE One Source Holdings, LLC, an affiliate of Platinum Equity, acquired an additional 8,143,635 shares of Custom Truck One Source, Inc. common stock.
• The acquisition was made at a price of $4.00 per share.
• The funds for this acquisition were sourced from capital contributions by PE One Source's members.
• Following this transaction, Platinum Equity and its affiliated reporting persons beneficially own an aggregate of 156,743,635 shares of Custom Truck One Source, Inc. common stock.
• This represents 69.6% of the Issuer's common stock outstanding as of January 30, 2025, based on a total of 225,288,832 shares outstanding.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. While the increased stake by a major private equity firm suggests confidence and potential for strategic value creation, the explicit mention of potential de-listing or take-private transactions introduces uncertainty for public shareholders, balancing the overall sentiment.

Positives

• The increased stake by a major private equity firm like Platinum Equity could signal strong confidence in Custom Truck One Source's long-term prospects and strategic value.
• The stated intention to review investments and potentially engage in strategic discussions suggests active ownership, which could lead to value-enhancing initiatives for the company.

Negatives

• The significant concentration of ownership (69.6%) by Platinum Equity could reduce the public float and liquidity of Custom Truck One Source's common stock.
• The explicit mention of potential 'extraordinary corporate transactions' such as a 'take-private transaction' or 'de-listing' could remove the stock from public markets, limiting future investment opportunities for current public shareholders.

Risks

• Potential for de-listing or de-registration of the Common Stock if a take-private transaction or similar extraordinary corporate transaction occurs.
• Changes to the Issuer's business or corporate structure, including changes in management or the composition of the Board, could alter the company's strategic direction.
• Uncertainty regarding future actions by the Reporting Persons, as they may acquire additional securities, sell portions, or pursue various corporate transactions based on ongoing evaluations.

Future Outlook

The Reporting Persons intend to continuously review their investment in Custom Truck One Source, Inc. and may acquire additional securities, sell existing holdings, or engage in discussions with management and the Board. They explicitly state the possibility of encouraging or seeking extraordinary corporate transactions, including mergers, reorganizations, take-private transactions (potentially leading to de-listing or de-registration), security offerings, stock repurchases, asset/business sales, changes to capitalization or dividend policy, or alterations to management or Board composition.

Management Comments

• "The Reporting Persons acquired the securities described in this Schedule 13D for investment purposes and they intend to review their investments in the Issuer on a continuing basis."
• "Any actions the Reporting Persons might undertake will be dependent upon the Reporting Persons' review of numerous factors, including, but not limited to: an ongoing evaluation of the Issuer's business, financial condition, operations and prospects; price levels of the Issuer's securities; general market, industry and economic conditions; the relative attractiveness of alternative business and investment opportunities; and other future developments."
• "The Reporting Persons, including its designees to the Issuer's Board in their positions as directors of the Issuer, may engage in discussions with management, the Board, and other securityholders of the Issuer and other relevant parties or encourage, cause or seek to cause the Issuer or such persons to consider or explore extraordinary corporate transactions."

Industry Context

This significant increase in ownership by a private equity firm like Platinum Equity in Custom Truck One Source, a provider of specialized truck and equipment solutions, highlights the ongoing trend of private capital seeking control stakes in publicly traded companies. Such moves often precede strategic restructuring, operational improvements, or eventual take-private transactions, which can reshape competitive landscapes within the specialized equipment and services industry.

Corporate Governance

Stakeholder Impact

• **Shareholders**: Potential for increased value if strategic initiatives are successful, but also risk of de-listing or take-private transactions which could limit future public market participation. Reduced liquidity due to concentrated ownership.
• **Employees**: Potential for changes in management or corporate structure could impact employment, though not explicitly stated.
• **Customers/Suppliers**: Potential changes in business strategy or operations could indirectly affect relationships, but no direct impact is indicated.
• **Creditors**: Changes in capitalization or corporate structure could impact the company's financial risk profile, though not explicitly detailed.

Next Steps

• Ongoing evaluation of the Issuer's business, financial condition, operations, and prospects by the Reporting Persons.
• Potential acquisition of additional securities or sale of existing holdings by the Reporting Persons.
• Possible engagement in discussions with Custom Truck One Source's management, Board, and other securityholders.
• Exploration of extraordinary corporate transactions, including mergers, reorganizations, take-private transactions, security offerings, stock repurchases, asset/business sales, changes to capitalization/dividend policy, or changes in management/Board composition.
• Retention of consultants and advisors, and discussions with potential sources of capital and third parties to facilitate consideration of strategic matters.

Key Dates

Keywords

Custom Truck One Source, Platinum Equity, Schedule 13D, Beneficial Ownership, Stock Purchase Agreement, Private Equity, Corporate Governance, Strategic Investment, Take-Private, De-listing, Common Stock