Nesco Holdings II, Inc. entered into a definitive agreement to acquire Custom Truck One Source, L.P., Utility One Source GP LLC, Blackstone UOS Feeder Fund BEP L.P. and Blackstone UOS Feeder Fund VI L.P. from a group of sellers for $1.5 billion on December 3, 2020. The consideration is subject to customary working capital adjustments, indebtedness and transaction expenses of Custom Truck as of Closing, as well as an adjustment on the basis of the target original equipment cost of the rental fleet inventory owned by Custom Truck as of the Closing Date, if any. In connection with the acquisition, Nesco and certain Sellers entered into the Rollover Agreements, pursuant to which such Sellers agreed to contribute a portion of their equity interests in CTOS with an aggregate value of $100 million in exchange for shares of Nesco's common stock. The contributions of equity interests in exchange for shares of Common Stock contemplated by the Rollover Agreements will be consummated immediately prior to the closing of the acquisition. The transaction is anticipated to be financed with a new $750 million asset-based revolving credit facility, of which approximately $400 million will be drawn at closing, and senior secured notes yielding up to $1 billion in gross cash proceeds and/or to the extent that the issuance of such Notes yields less than $1 billion in gross cash proceeds or such cash proceeds are otherwise unavailable to consummate the Transaction, loans under a senior secured bridge facility yielding up to $1 billion in gross cash proceeds. Debt financing commitments have been obtained from Bank of America, N.A., who will be leading the financing and BofA Securities, Inc.

In connection with the transaction, Platinum Equity, LLC ("Platinum") has committed to invest in the range of $700 million to $763 million and additional shares of Common Stock for an aggregate purchase price of not more than $100 million, if necessary, into Nesco in exchange for newly issued common stock. Promptly following the execution of the Investment Agreement and subject to the terms thereof, Nesco has agreed to use its reasonable best efforts to sell shares of Common Stock in a private placement, a registered public offering and/or a rights offering to its stockholders, in each case for the aggregate amount of up to $200 million. The proceeds of the Subscription and the Supplemental Equity Financing will be used to pay a portion of the purchase price in the Acquisition and other fees and expenses. Existing CTOS shareholders, including certain funds managed by The Blackstone Group, Inc., in its capacity as the current majority owner of CTOS, and certain members of the CTOS management team, are expected to invest approximately $100 million into Nesco in exchange for newly issued common stock also at the same price as Platinum. Energy Capital Partners and Capitol Investment, who together currently own 70% of Nesco's outstanding common stock, will retain their entire ownership positions in Nesco and have entered into voting agreements in support of the transaction. Subject to closing mechanics and an additional equity investment of up to $200 million, upon closing, Platinum is expected to own approximately 57% of Nesco's common stock, with existing CTOS shareholders owning approximately 7%, ECP owning approximately 10% and Capitol owning approximately 3%. In case of termination, upon valid termination due to a breach of the Purchase Agreement by Nesco, a fee of $10 million is payable by Nesco to Sellers, upon valid termination due to a breach of the Investment Agreement on the basis of Platinum's failure to use requisite efforts thereunder to cooperate in Nesco's financing of the transactions contemplated thereby, a fee of $10 million is payable by Platinum to Sellers, and the basis of certain other breaches by Platinum of the Investment Agreement, a fee of $44.25 million is payable by Platinum to Sellers, in each case other than where such breach by Platinum was the result, in any material respect, of a related breach by Nesco under the Investment Agreement, upon valid termination in circumstances in which the closing of the Acquisition does not occur due to Platinum's breach of its funding obligation under the Investment Agreement when the conditions thereto have been satisfied, a fee of $88.5 million is payable by Platinum to Sellers, and upon valid termination in circumstances in which the closing of the Acquisition does not occur due to the failure of the Debt Financing to be funded when the conditions to such funding are satisfied, a fee of $44.25 million is payable to Sellers, of which $34.25 million is payable by Platinum and $10 million is payable by Nesco.

For the year ended December 31, 2019 CTOS reported an adjusted EBITDA of $197.8 million and a net loss of $8.3 million. At closing, the Nesco Board of Directors will be reconstituted such that Blackstone, ECP and Capitol each retain one board seat and Platinum holds majority voting power of the Board. The combined company will be headquartered at the CTOS campus in Kansas City with significant operations maintained in Indiana. Together, the combined company will operate on a national scale with over 1,800 employees, 46 company-operated locations and more than 400 service technicians and 120 mobile service technicians available to support customers. Until the transaction closes, Nesco and Custom Truck One Source will continue to operate as separate companies and will conduct business as usual. The closing of the transaction is subject to customary closing conditions, including, among others, (a) the absence of laws or orders restraining, enjoining or otherwise prohibiting the consummation of the acquisition, (b) the expiration or termination of all applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (c) the completion of pre-closing reorganization transactions involving CTOS and certain of its affiliates, (e) the receipt of required consents or waivers, or the refinancing, of certain floor plan financing facilities of CTOS and its subsidiaries, (f) the completion of the financing transactions contemplated by buyer's debt and equity financing commitments for the acquisition, (g) the shares to be issued to certain sellers who have entered into Rollover and Contribution Agreements with Nesco being approved for listing on the New York Stock Exchange, subject only to official notice of issuance thereof, (h) the accuracy of the parties' representations and warranties in the Purchase Agreement, (i) the compliance in all material respects by the parties under the Purchase Agreement with the applicable covenants and agreements therein, and (j) the absence of any material adverse effect on Nesco and its subsidiaries or CTOS and its subsidiaries, in each case, taken as a whole. The transaction is also subject to shareholder approval, resignation of CTOS directors and execution of escrow and stockholder's agreement. The transactions has been unanimously approved by the Nesco Board of Directors. As of March 9, 2021, the transaction has been approved by Nesco Holdings' shareholders. The deal is expected to close in the first quarter of 2021.

Paul Sheridan, David Brown, Bradley Faris, Rohith Parasuraman, Patrick Shannon, Shagufa Hossain, Scott Forchheimer, Lisa Watts, Adam Kestenbaum, Matthew Conway and Mandy Reeves of Latham & Watkins LLP acted as the legal advisors to Nesco. Rhett Van Syoc, Cyril V. Jones, Robert Goodin, Michael Rigdon, Andy Veit and Mark Dundon of Kirkland & Ellis LLP acted as the legal advisors to CTOS. J.P. Morgan Securities LLC served as financial advisor and fairness opinion provider for Nesco. Citi served as financial advisor to CTOS. Phillip R. Mills of Davis Polk acted as legal advisor to J.P. Morgan Securities LLC in the transaction.

Nesco Holdings II, Inc. completed the acquisition of Custom Truck One Source, L.P., Utility One Source GP LLC, Blackstone UOS Feeder Fund BEP L.P. and Blackstone UOS Feeder Fund VI L.P. from a group of sellers for $1.5 billion on April 1, 2021. The purchase price is subject to customary working capital adjustments, as well as an adjustment on the basis of the target original equipment cost of the rental equipment owned by the Company as of the closing date, if any. In connection with the Acquisition, Nesco Holdings, Inc has changed its name to Custom Truck One Source, Inc. Its shares of common stock will trade on the NYSE under the ticker symbol "CTOS" beginning on April 5, 2021, and its existing warrants will trade on the NYSE under the ticker symbol "CTOS.WS". Nesco Holdings, Inc. leadership team also includes Ryan McMonagle as President and Chief Operating Officer and Brad Meader as Chief Financial Officer, both of whom previously held those positions at CTOS.