Atlas Copco agreed to sell 85.5 percent of RSC Equipment Rental to private equity firms Ripplewood Holdings and Oak Hill Capital Management for about $3.8 billion. Atlas Copco will receive about $3.3 billion in cash and assumed liabilities, plus up to $400 million of additional consideration in the form of notes, based on the achievement of profitability targets through 2008.

According to the terms of the transaction, announced Friday, the Stockholm, Sweden-based manufacturer will retain a 14.5-percent stake in the company. Based in Scottsdale, Ariz., RSC is the second largest equipment rental company in North America, with more than 5,000 employees and more than 450 locations. For the 12-month period ended June 30, the company generated more than $1.5 billion in revenue.