United Rentals to Acquire H&E Equipment Services Inc.

STAMFORD, Conn. and BATON ROUGE, La. (Jan. 14, 2025) ¬— United Rentals Inc. and H&E Equipment Services Inc. announced their entry into a definitive agreement under which United Rentals will acquire H&E for $92 per share in cash, reflecting a total enterprise value of approximately $4.8 billion, including approximately $1.4 billion of net debt.

Founded in 1961, H&E provides its customers with general rental fleet options, including aerial work platforms, earthmoving equipment, material handling equipment, and other general and specialty lines of equipment. With approximately 2,900 employees and $2.9 billion of rental fleet at original cost, the company serves a diverse mix of customers across both construction and industrial markets through its network of approximately 160 branches in over 30 U.S. states.
On a trailing 12-month basis through Sept. 30, 2024, H&E generated $696 million of adjusted EBITDA on total revenues of $1,518 million, translating to an adjusted EBITDA margin of approximately 45.8%.
 

Strong Strategic Rationale
The transaction is consistent with United Rentals’ “grow the core” strategy, and legacy H&E customers will benefit from one-stop access to United Rentals’ specialty rental offerings across Fluid Solutions, Matting Solutions, Onsite Services, Portable Storage & Modular Space, Power & HVAC, Tool Solutions and Trench Safety.

• H&E’s fleet, experienced employees and customer service footprint of branches across over 30 strategic U.S. states are complementary with United Rentals’ existing network. Importantly, the combination will increase capacity for United Rentals in key U.S. geographies.
• The combination will expand United Rentals’ rental fleet by almost 64,000 units with an original cost of over $2.9 billion and an average age of under 41 months, as well as roughly $230 million of nonrental fleet.
• United Rentals and H&E share many cultural attributes, including a focus on safety, a customer-first business philosophy, and best practices for talent development and retention. Critically, H&E employees will bring a wealth of experience to United Rentals and will have greater opportunities for career development within the larger combined organization.
   

Transaction Details
The boards of directors of United Rentals and H&E unanimously approved the transaction, which is subject to customary closing conditions, including a minimum tender of at least a majority of then-outstanding H&E common shares and the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. United Rentals intends to commence a tender offer by Jan. 28, 2025 to acquire all of the outstanding shares of H&E common stock for $92 per share in cash. Following completion of the tender offer, United Rentals will acquire all remaining shares not tendered in the offer through a second-step merger at the same price as in the tender offer. The transaction is expected to close in the first quarter of 2025. The company plans to update its 2025 financial outlook to reflect the combined operations following the completion of the transaction.

The merger agreement includes a 35-day “go-shop” period which runs through Feb. 17, 2025, during which H&E — with the assistance of BofA Securities, its exclusive financial advisor — will actively solicit, evaluate and potentially enter into negotiations with, and provide due diligence access to, parties that submit alternative proposals. H&E will have the right to terminate the merger agreement to accept a superior proposal subject to the conditions and procedures specified in the merger agreement, which H&E will file with a Current Report on Form 8-K. There can be no assurance that this 35-day “go shop” will result in a superior proposal, and H&E does not intend to disclose developments with respect to the solicitation process unless and until its board of directors makes a determination requiring further disclosure.

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