Herc Rentals Finalizes $3.9 Billion Acquisition of H&E Equipment

The $3.9 billion deal, which combines cash and stock options, was finalized on June 2 following its proclamation in Febuary. Herc offered $78.75 in cash along with shares of its own stock for each share of H&E.

In the equipment rental landscape, Herc is currently ranked fourth while H&E holds the fifth position.

“Acquiring H&E boosts our established strategy and solidifies our status as a leading rental service provider across North America,” stated Larry Silber, CEO of Herc Rentals.

“With H&E’s extensive network and resources now part of our operations, we’re positioned strongly in eleven out of the top twenty rental markets. This merger not only expands our fleet but also enhances our ability to offer diverse specialty and general rental products while maintaining high standards for customer service and safety,” he added enthusiastically.

This acquisition marks over fifty purchases made by Herc within just five years.

The Bigger Picture

The merger will elevate Herc’s total locations to 613 across North America—up from 450 before joining forces with H&E—creating approximately 10,500 jobs combined. prior to this deal, H&E boasted around 2,900 employees along with an extraordinary inventory that included about 64,000 pieces of equipment spread over more than thirty states.

This strategic move is crucial as size matters substantially in the equipment rental industry; it allows companies like Herc to compete more effectively against larger rivals such as United Rentals. Interestingly enough, United had initially sought to acquire H&E but lost out when they were outbid by herc—a situation that led them to incur a breakup fee amounting to $63.5 million due to their prior agreement with H&E.

Considering this development regarding their failed acquisition attempt with H&E Equipment Services earlier this year—where they had proposed $3.4 billion—United has decided instead to redirect those funds towards revitalizing their share repurchase program instead.
“Our priority is being responsible custodians of investor capital,” remarked Matthew Flannery CEO at United Rentals regarding their decision not to raise their bid for acquiring H&E.”