ARML3 Armac

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 autonomous work of José Augusto Carvalho Aragão, who began providing earthmoving services with 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 its operating profile, and capital strengthening, especially from the late 2000s onward, 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 multi-category equipment rental platform. In 2013, the entry of José Augusto Pereira Aragão, son of the founders, marked a new phase in structuring the rental offering in Brazil, with a focus on more structured contracts and operational efficiency gains. 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 became 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 built on converting machine ownership into a rental service, with contracts that combine equipment supply and associated services such as maintenance, technical support, logistics and, when required, operation. As of December 31, 2024, the company maintained a proprietary fleet of more than 11 thousand 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 rentals and service provision, with asset sales occurring on an ad hoc basis, mainly related to the decommissioning 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 its service offering, Armac is organized mainly 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 from three to five years, with equipment availability levels above 95% and defined deadlines for maintenance and replacement. “Simple Rentals,” in turn, are more closely linked to infrastructure projects – such as road and rail works, sanitation, renewable energy and urban projects – with shorter contract durations, often under one year, with no minimum rental period, under an asset-sharing model. This combination of contracts with recurring demand and flexible rentals enables more efficient fleet utilization, reducing asset idle time and diversifying sector exposure.

The equipment offered by Armac covers a wide spectrum of industrial and infrastructure applications. Among the yellow-line machines, 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 management, agricultural logistics, pulp and paper, as well as construction and infrastructure projects. The company operates independently of equipment manufacturers, acquiring machines from various global makers such as John Deere, Volvo, Hyundai, JCB, CASE, New Holland, Manitou, Caterpillar and Komatsu, which helps diversify the fleet and tailor it to different types of operations.

Geographically, Armac operates nationwide and serves clients in 23 Brazilian states and in the Federal District, focusing on sectors that benefit from structural characteristics of the country’s economy, such as agribusiness, mining and infrastructure investment. Fleet expansion and increased access to capital, especially after the 2021 IPO on B3, 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 6.2 thousand to 10.2 thousand assets, supported by significant CAPEX investments. In 2024, the company ended the year with around 11.2 thousand machines and pieces of equipment, totaling a gross rental fixed-asset value in the billions of reais, while at the same time maintaining a leverage level considered conservative relative to the 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 under long-term contracts. These transactions 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 growth vector in engineering services for earthmoving, from land analysis and project design through to execution of the works with its own yellow-line fleet.

On the regulatory front, Armac is subject to a set of rules that apply to transportation activities, rental of trucks and heavy equipment, 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 road infrastructure; the National Land Transport Agency (ANTT), which regulates and supervises land transport; and the Federal Highway Police, in charge of enforcing traffic rules 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 a capital structure and funding standpoint, Armac has made recurrent use of the Brazilian capital markets since going public on B3. The company has carried out successive issues 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 maturities. The issues carried out between 2021 and 2024 made it possible both to expand investment capacity and extend the amortization schedule, reducing significant amortizations until mid-2028. In parallel with the growth in 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.