ARML3

Armac is a Brazilian company specialized in renting machinery and heavy equipment, with shares traded on B3 under the ticker ARML3. Its origins go back to the independent work of José Augusto Carvalho Aragão, who began providing earthmoving services using yellow-line machines for construction and infrastructure. In 1994, the activity was formalized with the founding of Armac Locação e Equipamentos Ltda., consolidating an operation initially focused on local clients and small projects. Over more than three decades, the company went through a process of expansion, a shift in operating profile, and capital strengthening, especially from the late 2000s, when it decided to prioritize the rental of machinery and heavy equipment as the core of its strategy.

Starting in 2009, Armac redesigned its business model, migrating from an earthmoving services provider to a multicategory equipment rental platform. In 2013, the entry of José Augusto Pereira Aragão, son of the founders, marked a new phase in organizing the rental offering in Brazil, with a focus on more structured contracts and gains in operating efficiency. In 2014, Fernando Pereira Aragão, also a son of the founding couple and with experience in the financial market, joined management, boosting long-term planning and capital discipline. In 2020, the company was converted into a corporation, and the entry of Speed Fundo de Investimento em Participações Multiestratégia, managed by Gávea Investimentos, gave new momentum to growth, allowing it to accelerate investments and expand the fleet of equipment available for rental.

Armac’s business model is based on converting equipment ownership into a rental service, with contracts that combine the supply of equipment and the provision of associated services such as maintenance, technical support, logistics and, when required, operation. On December 31, 2024, the company had a proprietary fleet of more than 11,000 rentable pieces of equipment, including yellow-line machines, trucks, forklifts, aerial work platforms and generators. Gross operating revenue in 2024 came almost entirely from equipment rental and service provision, with occasional sales of property, plant and equipment mainly related to the disposal of used assets. The company operates with a single operating segment from an accounting standpoint, defined as equipment rental, concentrating revenue generation in contracts structured according to the client’s usage profile.

In terms of service offerings, Armac is mainly organized into two commercial modalities. So-called “Continuous Operations” serve the fertilizer, agribusiness, mining, pulp and paper, food and beverage chains, among other industrial segments, through long-term contracts, usually three to five years, with equipment availability rates above 95% and defined timelines for maintenance and replacement. “Simple Rentals,” in turn, are more closely tied to infrastructure projects – such as road and railway works, sanitation, renewable energy and urban interventions – with shorter-term contracts, often under one year, with no minimum rental period, under an asset sharing model. This combination of contracts with recurring demand and flexible rentals allows for more efficient use of the fleet, reducing idle time for assets and diversifying sector exposure.

The equipment offered by Armac covers a broad spectrum of industrial and infrastructure applications. Among yellow-line machines, the highlights include crawler tractors, backhoe loaders, wheel loaders, motor graders, hydraulic excavators, skid steer loaders, compactors and wheel tractors. The company also rents water trucks and dump trucks, aerial work platforms, forklifts and generators. These assets primarily serve sectors such as food and beverages, agribusiness, fertilizers, mining, forestry, agricultural logistics, pulp and paper, as well as construction and infrastructure projects. The company operates independently from equipment manufacturers, acquiring machines from several global makers such as John Deere, Volvo, Hyundai, JCB, CASE, New Holland, Manitou, Caterpillar and Komatsu, which helps diversify the fleet and adapt it to different types of operations.

Geographically, Armac operates nationwide and serves clients in 23 Brazilian states and the Federal District, focusing on sectors that benefit from structural characteristics of the country’s economy, such as agribusiness, mining and infrastructure investments. Fleet expansion and increased access to capital, especially after the IPO on B3 in 2021, allowed the company to rapidly grow its base of rentable assets. Between the end of 2021 and the end of 2023, the fleet grew from just over 6,200 to 10,200 assets, supported by significant CAPEX investments. In 2024, the company ended the year with around 11,200 machines and pieces of equipment, totaling a gross rental property, plant and equipment value of a few billion reais, while at the same time maintaining a leverage level considered conservative relative to business expansion.

Armac’s recent trajectory includes strategic acquisitions to expand its service portfolio and client base. In 2021, the company acquired RCB, specialized in renting aerial work platforms for segments such as retail, logistics and airlines, and Bauko Movimentação, focused on renting electric and combustion forklifts through long-term contracts. These deals brought greater diversification of equipment and contracts, a relevant backlog and long-standing commercial relationships. In 2024, Armac acquired Terram Engenharia de Infraestrutura, a company focused on directly contracting earthmoving works for large industries and logistics warehouses, adding a new vector of operations in earthmoving engineering services, from land analysis and project design to execution of works with its own yellow-line fleet.

On the regulatory front, Armac is subject to a set of rules that apply to transportation, truck and heavy equipment rental, as well as personal data processing. The main bodies related to the environment in which the company operates include the Ministry of Transport, responsible for formulating the national freight transport policy and coordinating highway infrastructure; the National Land Transport Agency (ANTT), which regulates and oversees land transport; and the Federal Highway Police, in charge of enforcing traffic regulations on federal highways. In addition, operations are subject to the general traffic rules defined by the National Traffic Council (CONTRAN) and to the legal framework for personal data protection in Brazil, in particular the General Data Protection Law (LGPD) and the guidelines of the National Data Protection Authority (ANPD), which regulate the use, processing and security of personal information involved in its activities.

From the standpoint of capital structure and funding, Armac has made recurrent use of the Brazilian capital markets since going public on B3. The company carried out successive issuances of debentures and Agribusiness Receivables Certificates (CRA) to support fleet growth and at the same time restructure liabilities, replacing higher-cost debt with instruments with longer tenors. The issuances carried out between 2021 and 2024 made it possible both to expand investment capacity and to extend the amortization schedule, reducing significant amortizations through mid-2028. In parallel with the growth of gross revenue and rental EBITDA, the company states that it pursues a capital allocation policy aimed at maintaining leverage at levels considered sustainable, seeking to balance organic and inorganic expansion with financial discipline.