Herc Rentals to Merge With H&E After Outbidding United
[Stay on top of transportation news: Get TTNews in your inbox.]
Herc Rentals is set to merge with fellow construction equipment supplier H&E Equipment Services after outbidding the largest player in the field, United Rentals, the company said Feb. 18.
Herc ranks No. 4 among equipment rental suppliers, according to Transport Topics data, while H&E ranks No. 5. United is the top-ranked company in the sector.
The nearly $3.9 billion cash-and-stock offer, which is binding, is worth around $476 million or 14% more than United’s all-cash offer.
H&E notified United of plans to terminate their merger agreement and United in turn said it does not intend to submit a revised proposal and was waiving its four-business-day match period under the two companies’ prior deal, Herc said.
Teaming up with H&E would accelerate Herc’s proven strategy to meaningfully outpace industry growth by providing a substantially expanded footprint, increased density in key regions with economies of scale, geographic and customer diversification, and a larger, younger fleet, the Bonita Springs, Fla.-based company said.
Host Seth Clevenger and TT's Connor Wolf discuss CES 2025 and the emerging technologies that could push the trucking industry forward. Tune in above or by going to RoadSigns.ttnews.com.
H&E has approximately 2,900 employees, around 64,000 pieces of rental equipment and about 160 branches in over 30 U.S. states.
Herc has about 7,600 employees and 453 locations across North America.
Size and geographic spread matter in the equipment rental sector, according to analysts, and merging with H&E would see Herc avoid falling further behind the largest player in the segment.
Following the deal, Herc said the combined company would have a leading presence in 11 of the top 20 rental regions and increased urban density in seven of the top 10 rental regions.
Herc’s management team also expects benefits to its bottom line as a result of the merger, promising about $300 million of annual earnings before interest, taxes, depreciation and amortization synergies by the end of year three, including around $125 million of cost synergies.
The merger agreement cannot be finalized until requirements under the United arrangement are satisfied, but that is expected by Feb. 19 and the deal is expected to close “midyear 2025.”
Baton Rouge, La.-based H&E will pay United a $63.5 million breakup fee to take the hand of its new suitor.
Now that the deal with H&E has been scrapped, United plans to restart its share repurchase program with the money it would have spent on the partnership.
“One of our key responsibilities as a management team is to be good stewards of our investors’ capital and our decision not to increase our offer for H&E reflects our commitment to financial discipline,” said United CEO Matthew Flannery.
United has about 1,500 rental locations in North America, including in 49 states and every Canadian province. It operates around 2,500 tractors.
Want more news? Listen to today's daily briefing below or go here for more info:
