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BONITA SPRINGS, Fla. & BATON ROUGE, La. - Herc Holdings Inc. (NYSE: NYSE:HRI), a prominent North American equipment rental supplier, has announced the termination of H&E Equipment Services, Inc.’s (NASDAQ: HEES) previous merger agreement with United Rentals , Inc. (NYSE: NYSE:URI). Herc will now proceed with the acquisition of H&E, with the transaction terms mirroring the proposal announced on February 18, 2025.
H&E shareholders will receive $78.75 in cash and 0.1287 shares of Herc common stock for each share they own, valuing H&E shares at $104.89 each based on Herc’s 10-day VWAP as of February 14, 2025. Post-transaction, H&E’s shareholders will own about 14.1% of the combined entity.
The acquisition aims to accelerate Herc’s growth strategy and enhance shareholder value. Larry Silber, Herc’s president and CEO, expressed respect for H&E’s high-quality platform and enthusiasm for the joint future. John M. Engquist, H&E’s executive chairman, also endorsed the transaction as beneficial for H&E shareholders, providing immediate premium value and the chance to partake in the combined company’s growth.
Strategically, the merger will make Herc the third-largest rental company in North America, with a stronger presence in key rental regions and a larger, more diverse fleet. Financially, the deal is expected to yield approximately $300 million in annual EBITDA synergies by the third year post-closing, with significant accretion to Herc’s cash earnings per share projected for 2026.
The combined company anticipates revenues of approximately $5.2 billion and EBITDA of $2.5 billion, with a net leverage of 3.8x at closing, expected to fall below 3.0x within 24 months. Herc’s dividend will be maintained post-transaction. H&E brings to the table current revenues of $1.52 billion and EBITDA of $303.56 million, according to InvestingPro data. Based on InvestingPro’s Fair Value analysis, H&E appears to be trading above its intrinsic value, suggesting the acquisition premium reflects significant strategic benefits. For comprehensive valuation insights and additional analysis, investors can access the detailed Pro Research Report, available exclusively on InvestingPro.
Herc will initiate a tender offer to acquire all outstanding H&E common stock for $78.75 per share in cash and 0.1287 shares of Herc common stock. The deal is expected to close mid-year 2025, pending majority tender of H&E shares, regulatory approvals, and customary closing conditions. Herc has secured committed financing for the cash portion of the transaction and has paid United Rentals a termination fee of $63,523,892 on behalf of H&E.
The information is based on a press release statement. Advisors for Herc include Guggenheim Securities, LLC, Credit Agricole (OTC:CRARY) Securities (USA) Inc, and Simpson Thacher & Bartlett LLP, with Joele Frank, Wilkinson Brimmer Katcher advising on communications. BofA Securities and Milbank LLP advised H&E.
This news article does not contain any promotional content or subjective assessment, focusing solely on the factual content of the press release.
In other recent news, Herc Holdings Inc. announced a binding acquisition proposal and merger agreement with H&E Equipment Services, Inc., offering $78.75 in cash and 0.1287 shares of Herc common stock per share. This proposal values the deal at approximately $104.89 per share, surpassing a previous offer from United Rentals, Inc. The transaction is anticipated to result in $300 million of run rate EBITDA synergies by the end of the third year post-closing and is expected to be accretive to Herc’s cash EPS by 2026. Following this development, United Rentals decided not to revise its proposal for H&E, which allows H&E to terminate their merger agreement with United Rentals. H&E has expressed a preference for Herc’s offer, which they consider superior, and Herc has agreed to cover the termination fee owed to United Rentals. UBS recently downgraded H&E Equipment Services from Buy to Neutral, despite raising the price target to $92.00, citing market uncertainties. Additionally, Ashtead Group (LON:AHT)’s lowered forecast for the US market affected the shares of United Rentals and other equipment rental companies, highlighting concerns over rental demand.
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