Herc Holdings Inc. (NYSE: HRI) has confirmed its execution of a binding acquisition proposal and merger agreement to the board of directors of H&E Equipment Services, Inc. d/b/a H&E Rentals (NASDAQ: HEES). Under the terms of the 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 on February 14, 2025. This represents a 14.0% premium to United Rentals’ $92.00 per share cash-capped consideration.
The acquisition is expected to generate approximately $300 million of run rate EBITDA opportunities, with Herc's President and CEO, Larry Silber, stating that the proposal provides immediate, significant premium for H&E and substantial upside value creation opportunity for both Herc and H&E shareholders.
The combined company is expected to have revenue and EBITDA of approximately $5.2 billion and $2.5 billion, respectively, and is anticipated to be high single-digit accretive to Herc’s cash earnings per share in 2026, ramping to greater than 20% as synergies are fully realized. Furthermore, the transaction is expected to generate ROIC in excess of Herc’s cost of capital within three years of closing.
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. 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's strategic and financial benefits from the acquisition include increased scale with complementary footprint and fleet mix, stronger competitor with enhanced customer offering, substantial identified synergies, attractive financial profile, and valuation multiple re-rating.
Herc Holdings, through its Herc Rentals Inc. subsidiary, is a full-line rental supplier with 453 locations across North America, offering products and services aimed at helping customers work more efficiently, effectively, and safely. In 2024, the company's total revenues were approximately $3.6 billion. As a result of these announcements, the company's shares have moved -3.5% on the market, and are now trading at a price of $178.95. If you want to know more, read the company's complete 8-K report here.
