Herc Holdings Acquires H&E Equipment Services in $4.4B Game-Changing Merger (HEES, HRI Merger)

In a headline-grabbing move announced on February 19, 2025, Herc Holdings Inc. (NYSE: HRI) and H&E Equipment Services (NASDAQ: HEES) revealed that they're entering a definitive merger agreement. With a total deal value pegged at $4.4 billion, Herc will acquire H&E in a mix of cash and stock valued at $104.89 per share, based on Herc's 10-day VWAP ending February 14, 2025​.

This isn’t your average corporate handshake. The merger is set to significantly redefine the competitive landscape in the equipment rental industry.

Breaking Down the Deal

Here’s how the transaction is structured:

• Cash per share: $78.75

• Stock per share: 0.1287 shares of Herc common stock

• Total value per H&E share: $104.89

• Equity stake: H&E shareholders will own approximately 14.1% of the combined company​

Notably, this deal comes after H&E walked away from a previously announced agreement with United Rentals (URI). A bold pivot that’s got the industry talking.

Why Herc Made the Move

According to Larry Silber, CEO of Herc, this merger is all about accelerating growth and delivering shareholder value. He called it a “unique opportunity” to fast-track Herc’s strategy and scale its platform across key markets​.

Strategic benefits include:

• Expanded footprint with a leading presence in 11 of the top 20 rental regions

• Enhanced urban market share in 7 of the top 10 markets

• A larger, younger, and more diversified rental fleet

• Addition of experienced H&E talent into Herc’s workforce

The Numbers That Matter

Let’s talk financials, because this deal is underpinned by strong economic logic.

• Estimated annual EBITDA synergies: around $300 million

  • $125 million in cost savings

  • $175 million in incremental revenue gains

• Combined revenue and EBITDA projections:

  • Approximately $5.2 billion in annual revenue

  • Approximately $2.5 billion in annual EBITDA

• Earnings per share accretion: high single digits by 2026, rising to over 20 percent as synergies are realized​

These numbers indicate a highly accretive deal that could generate significant long-term value.

The Integration Plan: What Happens Next?

The transition will be handled in phases, with a clear roadmap for integration. Internal communication shared with H&E employees, dubbed "The Inside Track," outlines how the merger will impact the workforce​.

What to expect:

• Most employees will continue their day-to-day operations with minimal disruption

• Email systems will transition, with H&E addresses remaining active temporarily

• Integration will roll out in three geographic phases

• Dedicated HR teams will assist with payroll, benefits, and system onboarding from the start

The emphasis throughout is on a smooth and transparent process for all employees involved.

Shareholder Snapshot

H&E shareholders have received a recommendation from the board to accept the offer, which includes both cash and Herc stock. The tender offer is set to expire on April 15, 2025, unless extended​. After closing, H&E will become a wholly owned subsidiary of Herc and will no longer trade publicly​.

Key points:

• No shareholder vote is needed due to Delaware’s Section 251(h)

• Each H&E share will convert into the agreed cash and stock consideration

• The board has determined the offer provides fair and compelling value

Financing the Future

Herc has lined up a robust financial strategy to fund this transaction.

• Committed financing includes a $4.5 billion bridge loan facility

• Lenders involved include JPMorgan, Goldman Sachs, Capital One, Wells Fargo, and others​

• Herc expects to use a mix of new debt and its existing borrowing capacity to finance the deal

Importantly, accessing the bridge loan is not expected to be necessary, underscoring Herc’s financial stability.

Industry Impact: What’s the Bigger Picture?

This merger is a game-changer. The new combined company will become the third-largest rental equipment provider in North America, trailing only United Rentals and Sunbelt Rentals.

Broader implications include:

• Greater pricing leverage in dense rental markets

• Expanded product offerings for customers

• Career growth and mobility for employees in a larger organization

• Stronger return profile for investors as cost and revenue synergies materialize

As the rental market continues to consolidate, this move could inspire further M&A activity across the sector.

Frequently Asked Questions

Why did H&E abandon its deal with United Rentals?

The board concluded that the Herc transaction offered a higher immediate value and stronger long-term upside for shareholders.

What will H&E shareholders receive?

Each share of H&E stock will be exchanged for $78.75 in cash and 0.1287 shares of Herc common stock.

What happens to H&E employees?

Most employees will remain in their current roles during the transition. Integration will be phased in, with HR support and system upgrades planned.

When will the merger close?

Expected in mid-2025, pending regulatory approvals and the minimum tender condition​.

Will the customer experience change?

Customers may benefit from broader product access and improved fleet availability. Operations are expected to continue seamlessly through the integration.

Final Thoughts

This merger between Herc Holdings and H&E Equipment Services is more than a financial transaction. It’s a strategic realignment aimed at growth, efficiency, and value creation. With a strong integration plan, clear financial benefits, and substantial market reach, this deal is poised to leave a lasting mark on the rental equipment landscape.

HEES, HRI Merger

HEES, HRI Merger

Disclaimer: This article is for informational purposes only and does not constitute financial, investment, or legal advice. Readers should consult with a professional advisor before making any financial decisions.