Herc Holdings, a North American equipment rental supplier, confirmed that it has executed a binding acquisition proposal and merger agreement to the Board of Directors of H&E Equipment Services pursuant to the “go-shop” provision as provided by H&E’s previously announced agreement with United Rentals.
H&E’s Board of Directors has determined that Herc’s cash and stock merger is superior to the $92.00 per share cash sale to United Rentals, and H&E has notified United Rentals that it intends to terminate its merger agreement and enter into a merger agreement with Herc. United Rentals notified H&E in writing that it does not intend to submit a revised proposal and has waived its four business day match period under the United Rentals merger agreement.
Under the terms of the Herc proposal, H&E shareholders would receive $78.75 in cash and 0.1287 shares of Herc common stock for each share they own, with a total value of $104.89 per share based on Herc’s 10-day VWAP as of market close February 14, 2025. Following the close of the transaction, H&E’s shareholders would own approximately 14.1% of the combined company.
Herc’s proposal represents a 14.0% premium to United Rentals’ $92.00 per share cash-capped consideration. Herc’s proposal also enables H&E’s shareholders to share in the value created from the $300 million of EBITDA synergies expected to be generated by the end of year three following close, and an anticipated improved valuation multiple for the combined company.
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 North America. These strategies combined with our operational excellence have fueled strong performance and growth faster than the industry. We are pursuing the proposed combination with H&E from a position of strength and view it as a path to accelerate Herc’s strategy and growth trajectory. Herc has tremendous respect for H&E and the high quality of the platform and customer centric culture of the organization. This combination would strengthen Herc’s position as a premier rental company in North America.”
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.”
