H&E Equipment Services Stock More Than Doubles On $4.8B Acquisition By United Rentals: Retail’s Enthusiastic

By Stocktwits Inc  |  First Published Jan 14, 2025, 8:30 PM IST

United Rentals plans to commence a tender offer by Jan. 28, 2025, to acquire all of the outstanding shares of H&E common stock.

H&E Equipment Services Stock More Than Doubles On $4.8B Acquisition By United Rentals: Retail’s Enthusiastic

Shares of H&E Equipment Services, Inc. (HEES) more than doubled on Tuesday morning after United Rentals Inc. (URI) announced it would acquire the firm for $92 per share in cash—over 100% higher than HEES’ closing price on Monday.

United Rentals is looking to commence a tender offer by Jan. 28 to acquire all of the outstanding shares of H&E common stock.

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Once the tender offer concludes, United Rentals will acquire all remaining shares not tendered in the offer through a second-step merger at the same price as in the tender offer. The deal is expected to close in the first quarter of 2025.

The transaction price reflects an enterprise value of approximately $4.8 billion, including roughly $1.4 billion of net debt. The price implies a multiple of 6.9x adjusted adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) for the trailing 12 months ended Sept. 30, 2024

H&E provides a mix of high-quality general rental fleets, including aerial work platforms, earthmoving equipment, material handling equipment, and other general and specialty lines of equipment.

On a trailing 12-month basis through Sept. 30, 2024, the firm generated $696 million of EBITDA on total revenue of $1.5 billion.

United Rentals believes the combination will expand its rental fleet by almost 64,000 units with an original cost of over $2.9 billion and an average age of under 41 months.

The firm said the combination will generate approximately $130 million of annualized cost synergies within 24 months of closing. United Rentals expects to realize approximately $120 million of annual revenue cross-sell synergies by the third year.

United Rentals CEO Matthew Flannery said purchasing H&E supports the firm’s strategy to deploy capital to grow the core business and drive shareholder value. “This acquisition allows us to better serve our customers with expanded capacity in key markets while also providing the opportunity to further drive revenue through our proven cross-selling strategy,” he said.

Following the announcement, retail sentiment surrounding United Rentals continued to trend in the ‘bullish’ territory (59/100), accompanied by ‘extremely high’ message volume.

United Rentals’ Sentiment Meter and Message Volume as of 9:10 a.m. ET on Jan. 14, 2025 | Source: Stocktwits

One optimistic user said the deal was a great way for URI to expand.

HEES shares have risen over 88% over the past year, while URI shares have risen over 29% in the period.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<

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