United Rentals set to Acquire H&E Equipment Services in $4.8 Billion Deal

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In a strategic move aimed at bolstering its presence in the U.S. rental equipment market, United Rentals, a leader in equipment rental services, has announced plans to acquire H&E Equipment Services for a total of $4.8 billion.

This acquisition, which includes approximately $1.4 billion in debt, will enable United Rentals to expand its footprint in key markets across the country.

Under the terms of the deal, United Rentals will offer $92 per share in cash to acquire all outstanding shares of H&E Equipment Services, representing a remarkable 109.4% premium over H&E’s recent closing price.

The transaction is expected to close by the first quarter of 2025, pending regulatory approvals.

This acquisition aligns with United Rentals’ strategy to enhance its rental capabilities and expand its customer base.

With a growing demand for rental equipment, particularly in the construction, industrial, and infrastructure sectors, the deal will provide United Rentals with greater capacity to serve its diverse clientele.

United Rentals is also anticipating significant cost synergies from the deal, estimated at approximately $130 million annually within two years of closing.

These savings will primarily result from corporate overhead reductions and operational efficiencies.

Additionally, the company expects to leverage procurement savings of around 5% compared to historical H&E pricing and a boost in revenue cross-sell synergies, with the potential to generate $120 million in annual synergies by year three.

By acquiring H&E Equipment Services, United Rentals will gain access to H&E’s extensive equipment fleet and customer base, further solidifying its position in the U.S. market.

The acquisition will also enhance the company’s ability to offer specialized rental services to a broader range of industries, including construction, manufacturing, and more.

To manage the increased leverage following the acquisition, United Rentals has paused its share repurchase program but will continue its current dividend policy.

The company remains focused on achieving a net debt-to-EBITDA ratio of approximately 2.0x within 12 months after the transaction is completed.

This move underscores United Rentals’ commitment to expanding its core business, better serving customers with an expanded fleet, and driving long-term shareholder value.

As the company continues to adapt to the evolving demands of the equipment rental industry, this acquisition is poised to further strengthen its market-leading position.

“This purchase of H&E supports our strategy to deploy capital to grow the core business and drive shareholder value,” United Rentals Chief Executive Matthew Flannery said in the press release Tuesday.

“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,” Flannery added.

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