United Rentals boosts equipment capacity with $4.8 billion H&E deal

(Reuters) -United Rentals said on Tuesday it would acquire smaller rival H&E Equipment Services (NASDAQ:HEES ) in a deal valued at $4.8 billion, as the company looks to tap into demand for equipment rentals in more markets within the United States.

Shares of H&E Equipment were up nearly 106% in premarket trading, United rose 3%.

Industrial equipment demand has remained strong from commercial construction firms, on the back of higher government spending on infrastructure and production delays at manufacturers.

Shareholders of H&E will receive $92 per share in cash, United said, representing a 109.4% premium to the stock's last close on Monday.

"This acquisition allows us to better serve our customers with expanded capacity in key markets while also providing the opportunity to further drive revenue," United Rentals (NYSE:URI ) CEO Matthew Flannery said.

The companies added the merger agreement also includes a 35-day "go-shop" period, which allows H&E to seek a competing offer.

Founded in 1961, H&E provides general rental fleet including aerial work platforms, earthmoving equipment, material handling equipment and other general and specialty lines of equipment.

The combination will expand United's rental fleet by almost 64,000 units, the companies said.



United Rentals expects the deal to generate about $130 million of annualized cost synergies within 24 months of closing.

Stamford, Connecticut-based United Rentals, one of the largest equipment rental firms in the world, has reported a rise in its annual revenue over the past three years.

Source: Investing.com