Herc Holdings to issue $2.75 billion in notes for H&E acquisition

BONITA SPRINGS, Fla. - Herc Holdings Inc. (NYSE: HRI), a North American rental supplier, announced its intention to offer $2.75 billion in senior unsecured notes to finance the acquisition of H&E Equipment Services, Inc. The private offering, exempt from the Securities Act of 1933 registration requirements, will feature notes due in 2030 and 2033, with terms to be set upon pricing.

The note offering is a key component of the funding strategy for Herc’s acquisition of H&E, initially disclosed on February 19, 2025. Herc’s tender offer to purchase all outstanding H&E shares includes a mix of cash and Herc common stock, with a second-step merger planned to secure any remaining shares.

If the note offering and acquisition do not close simultaneously, proceeds will be held in escrow until the merger of the Escrow Issuer with Herc Holdings. Upon completion, the notes will be guaranteed by Herc and its domestic subsidiaries, including H&E and its subsidiaries, subject to certain conditions.

Herc plans to use the net proceeds, alongside other financing, to finalize the acquisition, redeem H&E’s existing debt, and cover related transaction costs.

The notes are targeted at qualified institutional buyers in the U.S. and international investors under Regulation S of the Securities Act. They will not be registered under the Securities Act or state securities laws, thus limiting their sale within the United States to specific exemptions.

This press release does not constitute an offer to sell the notes or solicit purchases, and sales are prohibited in jurisdictions where unlawful. The information is disseminated in accordance with Rule 135c under the Securities Act.

Herc Holdings, established in 1965, operates Herc Rentals Inc. and reported revenues of approximately $3.6 billion in 2024, with an EBITDA of $857 million for the last twelve months. The company employs around 7,600 people and offers a range of rental equipment and services. According to InvestingPro analysis, the company appears undervalued based on its Fair Value calculations, with 12 additional exclusive ProTips available for subscribers. Get access to the comprehensive Pro Research Report, part of InvestingPro’s coverage of 1,400+ US stocks, for detailed insights into Herc’s financial health and growth prospects.

This announcement contains forward-looking statements subject to risks and uncertainties that could affect the actual outcomes, including the completion and benefits of the proposed H&E acquisition. The acquisition’s success hinges on various factors, such as shareholder tender participation and integration efficacy.

Investors are advised to review the exchange offer materials, registration statements, and solicitation/recommendation statements filed with the SEC for a comprehensive understanding of the proposed transaction. The materials are available on the SEC website and through the companies’ investor relations channels.

The information in this article is based on a press release statement from Herc Holdings Inc.

In other recent news, Herc Holdings reported its first-quarter 2025 earnings, revealing a significant shortfall in earnings per share (EPS), which came in at $1.30 compared to the anticipated $2.24. Despite this, the company experienced a slight revenue beat, reporting $861 million against the forecasted $847.71 million. Herc Holdings also incurred $74 million in transaction costs related to its acquisition of H&E Equipment Services. The company has moved closer to completing this acquisition, having cleared a significant antitrust waiting period under the Hart-Scott-Rodino Act. Analysts at KeyBanc Capital Markets maintained a Sector Weight rating on Herc Holdings, citing challenges in the first quarter, including missed expectations in EBITDA and rental revenue. They noted that while national accounts are growing, local accounts face difficulties due to high interest rates. Herc Holdings remains optimistic about future revenue synergies from the H&E acquisition, expecting a 20% synergy capture in the first year. The company also announced a 5% increase in its annual dividend to $2.80 per share.

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