Herc Holdings announces tender offer for H&E Equipment Services

BONITA SPRINGS, Fla. - Herc Holdings Inc. (NYSE: HRI), a prominent equipment rental supplier in North America, has initiated a tender offer to purchase all outstanding shares of H&E Equipment Services, Inc. (NASDAQ: HEES). The offer includes $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.

The offer, which commenced today, is contingent upon a majority of H&E’s shares being tendered, alongside customary regulatory approvals and other standard closing conditions. It is slated to expire just after midnight on April 15, 2025, unless extended or terminated early according to the merger agreement terms.

Herc plans to fund this acquisition through existing cash, proceeds from selling marketable securities, and funds from an amended credit facility as of March 11, 2025. Following the offer’s completion, Herc intends to acquire any remaining untendered H&E shares through a second-step merger at the same price.

The transaction, expected to finalize by mid-year 2025, is set to combine Herc’s extensive network of 451 locations and $3.6 billion in 2024 revenues with H&E’s operations. The merger aims to enhance the efficiency and safety of customer operations across North America.

Herc has filed a tender offer statement and a registration statement with the U.S. Securities and Exchange Commission (SEC), which includes an offer to purchase and related letter of transmittal. H&E has also filed a solicitation/recommendation statement with the SEC endorsing the offer to its shareholders.

Financial advisement for the transaction is provided by Guggenheim Securities, LLC as the lead advisor, with Credit Agricole Securities (USA) Inc. as co-advisor. Legal counsel is provided by Simpson Thacher & Bartlett LLP, and strategic communications are managed by Joele Frank, Wilkinson Brimmer Katcher.

The tender offer statement, registration statement, and other relevant documents are available free of charge on the SEC’s website and from the companies involved. H&E and Herc will continue to file regular reports and other disclosures with the SEC, accessible to the public.

This news is based on a press release statement and contains forward-looking statements that involve risks and uncertainties. Actual results may differ from those projected due to various factors, including the tender offer’s conditions and the integration of the two businesses. For comprehensive analysis of both companies involved in this merger, including detailed valuation metrics and future growth projections, investors can access the full Pro Research Reports available on InvestingPro, covering over 1,400 US equities with deep-dive analysis and actionable insights.

In other recent news, Herc Holdings Inc. has announced a definitive agreement to acquire H&E Equipment Services Inc. for $5.5 billion, a transaction expected to significantly expand Herc’s presence in the North American equipment rental market. The deal will be funded with approximately $4.5 billion in debt and $1 billion in common stock issuance, which has led S&P Global to revise Herc’s outlook to negative due to the anticipated increase in leverage. Moody’s Ratings also considers the transaction credit negative, projecting Herc’s pro forma debt-to-EBITDA ratio to rise to 4.1 times from 3.1 times. Despite these concerns, Herc expects the acquisition to yield approximately $300 million in annual EBITDA synergies by the third year post-closing.

S&P Global Ratings has placed H&E’s senior unsecured debt on CreditWatch with negative implications but notes the possibility of a credit rating upgrade if Herc successfully integrates H&E into its operations. The acquisition is expected to make Herc the third-largest rental company in North America, with projected revenues of $5.4 billion and adjusted EBITDA of over $2.3 billion in 2025. While the transaction promises growth and increased scale, it also carries integration risks and potential costs that could impact Herc’s financial performance in the short term. The deal is subject to regulatory approvals and is expected to close mid-year 2025.

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