Herc Holdings Extends Tender Offer to Acquire H&E Equipment Services

Rhea-AI Summary

Herc Holdings (NYSE: HRI) has announced an extension of its tender offer to acquire H&E Equipment Services (NASDAQ: HEES). The offer, which was set to expire on April 15, 2025, has been extended to April 29, 2025. Under the terms of the February 19, 2025 merger agreement, Herc is offering $78.75 in cash and 0.1287 shares of Herc common stock for each H&E share.

The extension aims to allow additional time for satisfying remaining conditions, including regulatory approvals. As of April 15, 2025, approximately 17,906,866 H&E shares (48.84%) have been validly tendered, with an additional 385,504 shares (1.05%) tendered through guaranteed delivery procedures.

Positive

• Nearly 50% of H&E shares already tendered, showing strong shareholder support
• Strategic acquisition to expand market presence and equipment rental portfolio

Negative

• Regulatory approvals still pending, causing delay in acquisition completion
• Extended tender offer period indicates potential complications in closing the deal

Insights

M&A Financial Analyst

Herc Holdings' extension of its tender offer for H&E Equipment Services represents a typical procedural step in a complex acquisition process. The 48.84% tender rate thus far demonstrates substantial shareholder support, though still short of what would be needed for completion. The extension to April 29th appears primarily driven by pending regulatory approvals, which is a standard occurrence in industry consolidation transactions of this scale.

The deal terms remain unchanged at $78.75 cash plus 0.1287 Herc shares for each H&E share, preserving the original valuation proposition. This structure gives H&E shareholders both immediate liquidity and ongoing participation in the combined entity's potential upside. The extension itself doesn't signal particular regulatory concerns but rather reflects the normal timeline for antitrust review in the equipment rental sector, where market concentration matters are carefully scrutinized.

What's notable is that Herc is proceeding with the acquisition despite the challenging interest rate environment, indicating strategic confidence in the long-term synergy potential. This transaction would significantly expand Herc's geographical footprint and equipment fleet, potentially strengthening its competitive position against industry leader United Rentals. The timing suggests Herc sees consolidation as necessary for scale advantages in an increasingly competitive market.

Equipment Rental Industry Specialist

This extension in Herc's acquisition of H&E represents an important development in the ongoing consolidation of the equipment rental market. The transaction would create the second-largest equipment rental company in North America, significantly closing the gap with United Rentals while distancing from smaller regional competitors. The regulatory scrutiny likely centers on market overlap analysis in specific regions where both companies maintain strong presence.

H&E's strong penetration in high-growth southern markets complements Herc's broader national coverage, potentially creating more balanced geographical exposure. The 50% tender threshold nearly reached suggests most institutional investors recognize the strategic rationale. The equipment rental sector continues to benefit from construction and infrastructure spending, with larger players better positioned to capitalize on fleet optimization, utilization improvements, and procurement advantages.

The combined entity would have enhanced flexibility to address equipment age challenges and deployment optimization across regions with different demand patterns. Fleet rationalization will likely follow completion, allowing for more strategic capital expenditure allocation. While integration complexities shouldn't be underestimated, particularly in branch operations and fleet management systems, the fundamental business model alignment between these two established players should mitigate major transition risks. The regulatory focus likely centers on ensuring healthy competition remains in specific metropolitan markets where the combined entity might achieve dominant position.

BONITA SPRINGS, Fla.--(BUSINESS WIRE)-- Herc Holdings Inc. (NYSE: HRI) (“Herc” or “the Company”) announced today that it has extended its previously announced tender offer (the “Offer”) to acquire all of the outstanding shares of H&E Equipment Services, Inc. (NASDAQ: HEES) (“H&E”) common stock for $78.75 in cash and 0.1287 shares of Herc common stock for each H&E share, in each case without interest, pursuant to the terms of the previously announced merger agreement, dated February 19, 2025, between Herc, HR Merger Sub, Inc. and H&E (the “Merger Agreement”).

The Offer, which was previously scheduled to expire at one minute past 11:59 p.m. Eastern Time, on April 15, 2025, has been extended until one minute past 11:59 p.m. Eastern Time, on April 29, 2025, unless further extended in accordance with the terms of the Merger Agreement. The Offer was extended to allow additional time for the satisfaction of the remaining conditions of the tender offer, including receipt of applicable regulatory approvals. The Offer remains subject to the conditions to the completion of the Offer, as set forth in the Prospectus/Offer to Exchange, dated March 19, 2025 (as amended or supplemented from time to time), the related Letter of Transmittal and certain other Offer documents, copies of which are attached to the Tender Offer Statement on Schedule TO filed by the Company and H&E with the U.S. Securities and Exchange Commission (the “SEC”) on March 19, 2025, as amended on April 16, 2025.

Computershare Trust Company, N.A., the depository and paying agent for the Offer, has advised the Company that as of close of business on April 15, 2025, approximately 17,906,866 H&E shares have been validly tendered and not validly withdrawn pursuant to the Offer, representing 48.84% of the outstanding H&E shares, and an additional 385,504 H&E shares were tendered pursuant to guaranteed delivery procedures, representing an additional approximate 1.05% of the outstanding H&E shares.

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 North America, and 2024 total revenues of approximately $3.6 billion. We offer products and services aimed at helping customers work more efficiently, effectively, and safely. Our classic fleet includes aerial, earthmoving, material handling, trucks and trailers, air compressors, compaction, and lighting equipment. Our ProSolutions® offering includes industry-specific, solutions-based services in tandem with power generation, climate control, remediation and restoration, pumps, and trench shoring equipment as well as our ProContractor professional grade tools. We employ approximately 7,600 employees, who equip our customers and communities to build a brighter future. Learn more at www.HercRentals.com and follow us on Instagram, Facebook and LinkedIn.

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 Company commenced the exchange offer on March 19, 2025. This communication is for informational purposes only and 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”), has filed or will file with the U.S. Securities and Exchange Commission (the “SEC”). This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The solicitation and offer to buy H&E shares will only be made pursuant to the Offer to Exchange and related exchange offer materials that the Company has filed with the SEC. At the time the exchange offer was commenced, the Company and Merger Sub filed a tender offer statement on Schedule TO (as subsequently amended), the Company filed a registration statement on Form S-4, and H&E filed a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC with respect to the exchange offer. H&E’S SHAREHOLDERS AND OTHER INVESTORS ARE URGED TO READ CAREFULLY THE EXCHANGE OFFER MATERIALS (INCLUDING AN OFFER TO EXCHANGE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER TENDER OFFER MATERIALS), THE REGISTRATION STATEMENT ON FORM S-4, AND THE SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, BECAUSE THEY WILL EACH CONTAIN IMPORTANT INFORMATION THAT HOLDERS OF H&E SHARES AND OTHER INVESTORS SHOULD CONSIDER BEFORE MAKING ANY DECISION WITH RESPECT TO THE EXCHANGE OFFER.

The Offer to Exchange, the related Letter of Transmittal, certain other exchange offer documents, as well as the registration statement on Form S-4 and the Solicitation/Recommendation Statement on Schedule 14D-9, have been or will be made available to H&E shareholders at no expense to them and are also made available for free at the SEC’s web site at http://www.sec.gov. Additional copies may be obtained for free by contacting either the Company or H&E. Copies of the documents filed with the SEC by H&E will be available free of charge on H&E’s website at https://investor.he-equipment.com/. Copies of the documents filed with the SEC by the Company will also be available free of charge on the Company’s website at https://ir.hercrentals.com/.

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).

View source version on businesswire.com: https://www.businesswire.com/news/home/20250415201637/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

T.J. O’Sullivan / 415-378-6841

Maggie Carangelo / 917-865-2500

Source: Herc Holdings Inc.

FAQ

What are the terms of Herc Holdings' tender offer for H&E Equipment Services?

Herc Holdings is offering $78.75 in cash and 0.1287 shares of Herc common stock for each H&E share, as per the merger agreement dated February 19, 2025.

Why did HRI extend its tender offer deadline for H&E Equipment Services?

The tender offer was extended to allow additional time for satisfying remaining conditions, including receipt of applicable regulatory approvals.

How many H&E shares have been tendered in the Herc Holdings acquisition offer?

As of April 15, 2025, 17,906,866 shares (48.84%) were validly tendered, plus 385,504 shares (1.05%) through guaranteed delivery procedures.

What is the new expiration date for Herc Holdings' tender offer of H&E Equipment?

The tender offer has been extended to one minute past 11:59 p.m. Eastern Time on April 29, 2025.