Herc Holdings Confirms Superior Proposal to Acquire H&E Equipment Services
Herc Holdings has submitted a superior proposal to acquire H&E Equipment Services for $104.89 per share, consisting of $78.75 in cash and 0.1287 shares of Herc common stock per H&E share. This offer represents a 14% premium over United Rentals' previous $92.00 per share cash offer. H&E shareholders would own approximately 14.1% of the combined company.
The merger is expected to generate $300 million in annual EBITDA synergies by year three, including $125 million in cost synergies and $175 million from revenue synergies. The combined company would have over 600 locations with a fleet worth approximately $10 billion, strengthening Herc's position as North America's third-largest rental company.
The transaction is projected to close mid-year 2025, subject to regulatory approvals and tender of majority H&E shares. The deal is expected to be high single-digit accretive to Herc's cash EPS in 2026, increasing to over 20% as synergies are realized.
Herc Holdings ha presentato una proposta superiore per acquisire H&E Equipment Services a $104,89 per azione, composta da $78,75 in contanti e 0,1287 azioni ordinarie di Herc per ogni azione H&E. Questa offerta rappresenta un premio del 14% rispetto all'offerta precedente di $92,00 per azione in contanti di United Rentals. Gli azionisti di H&E possederebbero circa il 14,1% della società combinata.
Si prevede che la fusione genererà $300 milioni in sinergie annuali di EBITDA entro il terzo anno, inclusi $125 milioni in sinergie di costo e $175 milioni da sinergie di ricavo. La società combinata avrebbe oltre 600 sedi con una flotta del valore di circa $10 miliardi, rafforzando la posizione di Herc come terza società di noleggio più grande del Nord America.
La transazione dovrebbe chiudersi a metà del 2025, soggetta ad approvazioni regolatorie e all'offerta della maggioranza delle azioni H&E. Si prevede che l'accordo avrà un impatto positivo a una cifra alta sull'EPS in contante di Herc nel 2026, aumentando a oltre il 20% man mano che vengono realizzate le sinergie.
Herc Holdings ha presentado una propuesta superior para adquirir H&E Equipment Services por $104.89 por acción, que consiste en $78.75 en efectivo y 0.1287 acciones comunes de Herc por cada acción de H&E. Esta oferta representa una prima del 14% sobre la oferta en efectivo anterior de $92.00 por acción de United Rentals. Los accionistas de H&E poseerían aproximadamente el 14.1% de la empresa combinada.
Se espera que la fusión genere $300 millones en sinergias anuales de EBITDA para el tercer año, incluyendo $125 millones en sinergias de costos y $175 millones de sinergias de ingresos. La empresa combinada tendría más de 600 ubicaciones con una flota valorada en aproximadamente $10 mil millones, fortaleciendo la posición de Herc como la tercera compañía de alquiler más grande de América del Norte.
Se proyecta que la transacción se cierre a mediados de 2025, sujeta a aprobaciones regulatorias y la oferta de la mayoría de las acciones de H&E. Se espera que el acuerdo tenga un impacto positivo de un solo dígito alto en el EPS en efectivo de Herc en 2026, aumentando a más del 20% a medida que se realicen las sinergias.
Herc Holdings는 H&E Equipment Services를 주당 $104.89에 인수하기 위한 우수한 제안을 제출했습니다. 이 제안은 현금 $78.75와 H&E 주식당 0.1287주의 Herc 보통주로 구성되어 있습니다. 이 제안은 United Rentals의 이전 현금 제안인 주당 $92.00에 비해 14%의 프리미엄을 나타냅니다. H&E 주주들은 합병된 회사의 약 14.1%를 소유하게 됩니다.
합병은 세 번째 해까지 연간 $300 백만의 EBITDA 시너지를 생성할 것으로 예상됩니다, 여기에는 $125 백만의 비용 시너지와 $175 백만의 수익 시너지가 포함됩니다. 합병된 회사는 약 $10억의 가치를 지닌 600개 이상의 지점을 보유하게 되며, Herc는 북미에서 세 번째로 큰 임대 회사로서의 입지를 강화합니다.
거래는 2025년 중반에 마무리될 것으로 예상되며, 규제 승인 및 H&E 주식의 대다수 인수가 필요합니다. 이 거래는 2026년에 Herc의 현금 EPS에 대해 높은 단일 자릿수의 긍정적인 영향을 미칠 것으로 예상되며, 시너지가 실현됨에 따라 20% 이상으로 증가할 것입니다.
Herc Holdings a soumis une proposition supérieure pour acquérir H&E Equipment Services pour 104,89 $ par action, composée de 78,75 $ en espèces et de 0,1287 actions ordinaires de Herc par action H&E. Cette offre représente une prime de 14 % par rapport à l'offre précédente en espèces de 92,00 $ par action de United Rentals. Les actionnaires de H&E détiendraient environ 14,1 % de la société combinée.
La fusion devrait générer 300 millions $ de synergies annuelles d'EBITDA d'ici la troisième année, y compris 125 millions $ de synergies de coûts et 175 millions $ de synergies de revenus. La société combinée disposerait de plus de 600 emplacements avec une flotte d'une valeur d'environ 10 milliards $, renforçant ainsi la position de Herc en tant que troisième plus grande société de location en Amérique du Nord.
La transaction devrait être finalisée au milieu de l'année 2025, sous réserve des approbations réglementaires et de l'offre de la majorité des actions H&E. L'accord devrait avoir un impact positif à un chiffre élevé sur le BPA en espèces de Herc en 2026, atteignant plus de 20 % à mesure que les synergies sont réalisées.
Herc Holdings hat ein überlegendes Angebot zur Übernahme von H&E Equipment Services für 104,89 $ pro Aktie eingereicht, das aus 78,75 $ in bar und 0,1287 Aktien von Herc pro H&E-Aktie besteht. Dieses Angebot stellt eine Prämie von 14 % gegenüber dem vorherigen Angebot von United Rentals in Höhe von 92,00 $ pro Aktie in bar dar. H&E-Aktionäre würden etwa 14,1 % des fusionierten Unternehmens besitzen.
Die Fusion wird voraussichtlich 300 Millionen $ an jährlichen EBITDA-Synergien bis zum dritten Jahr generieren, einschließlich 125 Millionen $ an Kostensynergien und 175 Millionen $ aus Umsatzeffekten. Das fusionierte Unternehmen würde über 600 Standorte mit einer Flotte im Wert von etwa 10 Milliarden $ verfügen und die Position von Herc als drittgrößtes Mietunternehmen in Nordamerika stärken.
Die Transaktion wird voraussichtlich Mitte 2025 abgeschlossen, vorbehaltlich der behördlichen Genehmigungen und der Übernahme der Mehrheit der H&E-Aktien. Der Deal wird voraussichtlich im Jahr 2026 einen positiven Einfluss auf das Cash-EPS von Herc im hohen einstelligen Bereich haben, der sich auf über 20 % erhöhen wird, sobald die Synergien realisiert werden.
- Premium offer of $104.89 per share, 14% higher than previous United Rentals bid
- Expected $300M annual EBITDA synergies by year three post-closing
- High single-digit EPS accretion in 2026, growing to >20% with full synergies
- Combined fleet worth $10B with 600+ locations
- Expected ROIC above cost of capital within three years
- Enhanced market position in 11 of top 20 rental regions
- Net leverage of 3.8x at close, requiring 24 months to reach target range below 3.0x
- Significant integration period of three years to achieve full synergies
Insights
This strategic acquisition positions Herc for significant market share expansion in the equipment rental sector, with the combined entity controlling approximately $10 billion in fleet assets across 600+ locations. The deal's structure is particularly noteworthy, offering H&E shareholders both immediate value through the cash component and future upside potential through the stock portion, which will represent 14.1% ownership in the combined company.
The projected $300 million in synergies appears achievable given the complementary geographic footprints and operational overlap. The revenue synergy target of $175 million is particularly compelling as it stems from enhanced market density in key regions and cross-selling opportunities. The cost synergies of $125 million are likely to come from fleet optimization, procurement savings, and operational efficiencies.
The transaction's financial engineering is sophisticated, with the leverage profile starting at 3.8x and expected to decrease below 3.0x within two years. This deleveraging trajectory, combined with the high free cash flow conversion characteristics of the synergies, suggests strong potential for value creation. The high single-digit EPS accretion by 2026, ramping to 20%+ as synergies materialize, indicates substantial shareholder value creation potential.
The deal strengthens Herc's competitive position in 11 of the top 20 rental regions, with increased urban density in 7 of the top 10 markets. This enhanced geographic presence, combined with a younger fleet and broader specialty equipment offerings, should improve the company's ability to serve national accounts and capture market share from competitors.
However, investors should monitor several key factors: the execution risk in achieving the projected synergies, potential integration challenges across the expanded network, and the impact of any required divestitures to satisfy regulatory requirements. The success of this transaction will largely depend on management's ability to maintain customer relationships during the integration period while simultaneously extracting operational efficiencies.
H&E Deems Herc’s
Herc Proposal Provides Immediate, Significant Premium for H&E and Substantial Upside Value Creation Opportunity for Both Herc and H&E Shareholders
Herc and H&E Combination Expected to Generate Approximately
Acquisition Substantially Scales Herc’s Premier Platform and Accelerates Strategy for Industry Leading Growth and Superior Value Creation
Expected to be High Single Digit Accretive to Herc’s Cash EPS in 2026 and Ramping to Greater than
Expected to Generate ROIC in Excess of Cost of Capital Within Three Years of Closing
Herc to Hold Call and Webcast at 8:30 a.m. ET Today
Under the terms of the Herc proposal, H&E shareholders would receive
Herc’s proposal represents a
H&E is a leading high quality rental business that has invested strategically in its fleet and branch network consistently over the last several years. Herc’s combination 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.
Larry Silber, Herc’s president and chief executive officer, said, “Since becoming an independent, public company in 2016, Herc has achieved tremendous success. Through greenfield development and strategic acquisitions, we have significantly increased our scale and expanded our geographic reach. Investments in our general rental and specialty equipment solutions offering as well as technology, innovation and people, have enhanced the customer experience and made Herc a partner of choice for local and national accounts across
Silber continued, “Herc’s cash and stock merger consideration provides H&E shareholders with an immediate and significant premium. In addition, by combining our companies, we would unlock substantial upside opportunity for both Herc and H&E shareholders. As our track record shows, we are a disciplined and experienced acquiror, and this transaction meets all of our value creation M&A criteria.”
Strategic and Financial Benefits
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Increased scale with complementary footprint and fleet mix: This transaction would accelerate both companies’ growth strategies and create a platform of scale that would enhance the combined company’s competitive differentiators in the equipment rental industry and enable it to serve more high-value projects from large national accounts. The acquisition would strengthen Herc’s position as the 3rd largest rental company in
North America . The combined company would have a leading presence in 11 of the top 20 rental regions and increased urban density in 7 of the top 10 rental regions. In addition, it would have a larger, younger fleet, offering a variety of specialty equipment solutions and a broad range of general rental products. The combined company’s customer base will also have more diversity than either company on a standalone basis, positioning it for long-term, sustainable growth through market cycles. The combined company will have more than 600 locations with a fleet original equipment cost of approximately$10 billion - Stronger competitor with enhanced customer offering: Like for H&E, superior customer service and support is a key priority for Herc. By joining both H&E’s and Herc’s capabilities, the combined company can leverage Herc’s industry-leading customer facing technology and an expanded fleet to better capitalize on the accelerating secular shift towards rental.
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Substantial identified synergies: Based on detailed analysis, Herc is confident that it can achieve approximately
$300 million $125 million $175 million -
Attractive financial profile: The combination creates a company with revenue and EBITDA of approximately
$5.2 billion $2.5 billion 20% as synergies are fully realized. In addition, the transaction is expected to generate ROIC in excess of Herc’s cost of capital within three years of closing. The combined company will be prudently capitalized, with net leverage of 3.8x at close, prior to synergy realization, and projected to be below 3.0x and in Herc’s targeted range within 24 months of closing. - Valuation multiple re-rating: As a leading equipment rental solutions provider with a powerful value creation platform that outpaces market growth, increased liquidity, and greater investor interest that comes with a scaled company, Herc believes that the combined company should trade at a higher multiple that is more consistent with comparable company valuation multiples in our sector.
Additional Transaction Details
Upon termination of H&E’s existing agreement with United Rentals and the execution of a definitive merger agreement between Herc and H&E, Herc intends to commence a tender offer to acquire all of the outstanding shares of H&E common stock for a per share value of
The transaction is expected to close mid-year 2025, subject to the majority of H&E’s shares being tendered into the offer, the receipt of customary regulatory approvals and closing conditions.
The proposed transaction is not subject to a financing condition. Herc has received an executed debt commitment letter from Credit Agricole Corporate and Investment Bank with respect to the financing of the proposed transaction.
Herc Advisors
Guggenheim Securities, LLC is serving as lead financial advisor. Credit Agricole Securities (
Call and Webcast Information
Herc Holdings will host a call and webcast today at 8:30 a.m.
Those who wish to listen to the live conference call and view the accompanying presentation slides should visit the Events and Presentations tab of the Investor Relations section of the Company's website at https://IR.HercRentals.com. The press release and presentation slides for the call will be posted to this section of the website prior to the call.
About Herc Holdings Inc.
Founded in 1965, Herc Holdings Inc., which operates through its Herc Rentals Inc. subsidiary, is a full-line rental supplier with 453 locations across
Cautionary Note Regarding Forward Looking Statements
This communication includes “forward-looking statements,” within the meaning of Section 21E of the Securities Exchange Act, as amended, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements related to the Company, H&E and the proposed acquisition of H&E by the Company that involve substantial risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed or implied by such statements. Forward-looking statements in this communication include, among other things, statements about the potential benefits of the proposed transaction, the Company’s plans, objectives, expectations and intentions, the financial condition, results of operations and business of each of the Company and H&E, expected valuation and re-rating opportunities for the combined company, and the anticipated timing of closing of the proposed transaction. Forward-looking statements are generally identified by the words "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes," "forecasts," "looks," and future or conditional verbs, such as "will," "should," "could" or "may," as well as variations of such words or similar expressions. All forward-looking statements are based upon our current expectations and various assumptions and apply only as of the date of this communication. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that our expectations, beliefs and projections will be achieved or that the completion and anticipated benefits of the proposed transaction can be guaranteed, and actual results may differ materially from those projected. You should not place undue reliance on forward-looking statements.
There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from those suggested by our forward-looking statements, including, but not limited to, (i) the possibility that the sufficient number of H&E’s shares are not validly tendered into the tender offer to meet the minimum condition; (ii) the Company’s ability to implement its plans, forecasts and other expectations with respect to H&E’s business after the completion of the proposed transaction and realized expected synergies; (iii) the ability to realize the anticipated benefits of the proposed transaction, including the possibility that the expected benefits from the proposed transaction will not be realized or will not be realized within the expected time period; (iv) the Company and H&E may be unable to obtain regulatory approvals required for the proposed transaction or may be required to accept conditions that could reduce the anticipated benefits of the proposed transaction as a condition to obtaining regulatory approvals; (v) the length of time necessary to consummate the proposed transaction may be longer than anticipated; (vi) problems may arise in successfully integrating the businesses of the Company and H&E, including, without limitation, problems associated with the potential loss of any key employees, customers, suppliers and other counterparties of H&E; (vii) the proposed transaction may involve unexpected costs, including, without limitation, the exposure to any unrecorded liabilities or unidentified issues during the due diligence investigation of H&E or that are not covered by insurance, as well as potential unfavorable accounting treatment and unexpected increases in taxes; (viii) the Company’s business may suffer as a result of uncertainty surrounding the proposed transaction, any adverse effects on our ability to maintain relationships with customers, employees and suppliers; (ix) the occurrence of any event, change to other circumstances that could give rise to the termination of the merger agreement, the failure of the closing conditions included in the merger agreement to be satisfied, or any other failure to consummate the proposed transaction; (x) any negative effects of the announcement of the proposed transaction of the financing thereof on the market price of the Company common stock or other securities; (xi) the industry may be subject to future risks including those set forth in the “Risk Factors” section in the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and in the other filings with the SEC by each of the Company and H&E; (xii) United Rentals, Inc. may make a superior offer; and (xiii) Herc may not achieve its valuation or re-rating opportunities. The foregoing list of factors is not exhaustive. Investors should carefully consider the foregoing factors and the other risks and uncertainties that affect the businesses of the Company and H&E, including those described in the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and in the other filings with the SEC by each of the Company and H&E. All forward-looking statements are expressly qualified in their entirety by such cautionary statements. We undertake no obligation to update or revise forward-looking statements that have been made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.
Additional Information and Where to Find It
The tender offer described herein has not yet commenced, and this communication is neither an offer to purchase nor a solicitation of an offer to sell shares, nor is it a substitute for any offer materials that the Company and its acquisition subsidiary, HR Merger Sub Inc. (“Merger Sub”), will file with the
In addition to the tender offer materials, the Company and H&E file annual, quarterly and current reports, proxy statements and other information with the SEC, which are available to the public at the SEC’s web site (http://www.sec.gov).
Information Regarding Non-GAAP Financial Measures
In addition to results calculated according to accounting principles generally accepted in
View source version on businesswire.com: https://www.businesswire.com/news/home/20250217058592/en/
Leslie Hunziker
Senior Vice President
Investor Relations, Communications & Sustainability
leslie.hunziker@hercrentals.com
239-301-1675
Joele Frank, Wilkinson Brimmer Katcher
HRI-media@joelefrank.com
Sam Kahane / 631-413-2426
Tarik Garvey / 609-738-5809
Source: Herc Holdings Inc.
FAQ
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