H&E Equipment deems Herc Holdings proposal ‘superior’ to United Rentals

Herc Holdings (HRI) confirmed that it has executed a binding acquisition proposal and merger agreement to the board of directors of H&E Equipment Services, Inc. d/b/a H&E Rentals (HEES) pursuant to the “go-shop” provision as provided by H&E’s previously announced agreement with United Rentals (URI). H&E’s board of directors has determined that Herc’s cash and stock merger is superior to the $92.00 per share cash sale to United Rentals, and H&E has notified United Rentals that it intends to terminate its merger agreement and enter into a merger agreement with Herc. United Rentals notified H&E in writing that it does not intend to submit a revised proposal and has waived its four business day match period under the United Rentals merger agreement. Under the terms of the Herc 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 February 14. Following the close of the transaction, H&E’s shareholders would own approximately 14.1% of the combined company. Herc’s proposal represents a 14% premium to United Rentals’ $92.00 per share cash-capped consideration. Herc’s proposal also enables H&E’s shareholders to share in the value created from the $300M of EBITDA synergies expected to be generated by the end of year three following close, and an anticipated improved valuation multiple for the combined company. Upon termination of H&E’s existing agreement with United Rentals and the execution of a definitive merger agreement between Herc and H&E, Herc intends to commence a tender offer to acquire all of the outstanding shares of H&E common stock for a per share value of $78.75 in cash and 0.1287 shares of Herc common stock. 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. The proposed transaction is not subject to a financing condition. Herc has received an executed debt commitment letter from Credit Agricole Corporate and Investment Bank with respect to the financing of the proposed transaction.