Herc to buy H&E for $3.83 billion after rival United Rentals exits deal

United Rentals

19/02/2025 15:07

Feb 19 (Reuters) - Machinery rentals firm Herc Holdings
 HRI.N  has signed a deal to buy H&E Equipment Services  HEES.O 
for $3.83 billion, excluding debt, after H&E terminated its
merger agreement with United Rentals  URI.N , the companies said
on Wednesday.
    The cash and stock deal will combine the world's third- and
fifth-largest firms that rent out machinery for construction
sites.
    United Rentals, which had entered into an agreement to buy
H&E last month, later dropped out. Following H&E's previous
agreement with United Rentals, Herc paid a termination fee of
$63.52 million to United Rentals on behalf of H&E.
    The buyout comes at a time when equipment rental demand is
rising, as contractors find it more cost-effective to rent items
such as pumps and air conditioning for their construction sites,
rather than owning them.
    H&E's shareholders will own about 14.1% of the combined
company after the deal's completion, according to the terms.
    Herc's offer of $78.75 in cash and 0.1287 shares of Herc
common stock for each H&E share represents a premium of nearly
20% to the stock's last close on Friday.
    The transaction was valued at $5.3 billion, including about
$1.5 billion in debt, compared to United Rentals' $4.8 billion
bid, which included debt.
    The merged company is expected to gain around $300 million
in annual EBITDA (earnings before interest, taxes, depreciation
and amortization) synergies within three years of the deal being
finalized. 
    The transaction is expected to close by mid-2025. 
    Founded in 1961, H&E provides a rental fleet including
aerial work platforms, earthmoving equipment, material handling
equipment and other general and specialty lines.

 (Reporting by Kannaki Deka in Bengaluru; Editing by Pooja
Desai)
 ((Kannaki.Deka@thomsonreuters.com;))