14.01.2025

United to acquire H&E

US based United Rentals is to acquire H&E Equipment Services for $92 a share in cash, reflecting a total enterprise value of approximately $4.8 billion, including around $1.4 billion of net debt.

A tender offer will launch on January 28th for all of the outstanding shares of H&E common stock and is expected to close within the next three months. H&E will have the right to pull out of the deal over the next 35 days if it receives a better offer than United’s offer of $92 per share.

H&E had revenues in the region of $1.52 billion for the 12 months to the end of September, with an EBITDA of $696 million.

H&E opened in Batton Rouge, Louisiana in 1961 when Tom Engquist and Houston equipment distributor Frank Head spotted the opportunity to exploit the growth along the Mississippi River which was driving demand for construction equipment. The company was appointed as distributors for Komatsu earthmoving equipment and Grove cranes. In 1968 the company was acquired by Southwest Growth Pool, with Tom Engquist staying on to manage the business. Six years later Engquist managed to buy the business back along with his minority partner Bob Kennedy. The company sold its crane business to Manitowoc in 2021 to become a pure rental business. For the full company history see below

The rental fleet today includes aerial work platforms, telehandlers and earthmoving equipment, along with general and speciality products, available from 160 locations across 30 states with around 2,900 employees. The deal will take the United rental fleet to almost 64,000 units with an average age of less than 41 months.

United expects the merging of corporate overheads and back office operations to save around $130 million a year within 24 months and cut around five percent from H&E’s procurement costs, as a result of its greater buying power. On top of this United hopes to generate around $120 million of additional cross-selling revenues a year

United’s chief executive Matthew Flannery said: “In H&E we’re acquiring a well run operation that’s primed to benefit from our technology, operations and broad value proposition. Most importantly, we’re gaining a great team that shares our intense focus on safety and customer service. We’ll be working side by side throughout the integration to capitalise on best in class expertise from both sides. We will use our well honed integration playbook as we prepare the acquired branches to take full advantage of our systems and operational capabilities and gain from our employee and customer centric culture. I look forward to welcoming our new team members upon the closing of the acquisition.”

“This purchase of H&E supports our strategy to deploy capital to grow the core business and drive shareholder value and allows us to better serve our customers with expanded capacity in key markets while also providing the opportunity to drive further revenue through our proven cross-selling strategy. Not only does the agreement satisfy the rigorous strategic, financial and cultural standards we set for acquisitions, but it also drives attractive returns for our shareholders.”

H&E chief executive Bradley Barber added: “I’m extremely proud of what we’ve built at H&E over the past 60 years and am confident that our combination with United Rentals will take the business to new heights going forward.”

Executive chairman John M Engquist said: “I couldn’t be more pleased with this win win outcome for both organisations, our customers and our shareholders. Importantly, I want to thank our employees for driving the results that made this transaction possible. I am confident that we’ve found an excellent landing spot for them, and I am excited for the new opportunities they will have as part of United Rentals.”

H&E - a 63 year history

H&E was set up in 1961 as Head & Engquist in Baton Rouge, Louisiana, by Tom Engquist and Houston equipment distributor Frank Head. They could see the opportunities to provide earthmoving and construction equipment with the growth along the Mississippi River. The company became the Komatsu and Grove crane distributor for Louisiana. In 1968 the company was acquired by Southwest Growth Pool, which appointed Tom Engquist to manage the business. In 1974 Southwest Growth Pool was liquidated and sold the Head & Engquist business to Tom Engquist and minority partner Bob Kennedy.

In the late 1980s the company acquired Grove crane distributor South Texas Equipment from Grove, and opened branches in Beaumont, Texas as well as Shreveport, and Lake Charles, Louisiana. Tom Engquist’s son, John took over the business in 1995, and in 1998 it acquired Manitowoc dealers Martin Equipment in Dallas and Coastal Crane in Houston providing coverage of the market in south Texas, Louisiana, Mississippi, Alabama, and Tennessee.

As the millennium approached the company moved into the aerial lift and telehandler market in a big way and began adding to its branch network, merging with ICM Equipment in 2002. The combined business operated from 47 locations with a rental fleet of more than 15,000 units.

In 2006 H&E went public, with an IPO and acquired Eagle High Reach in California. The following year it took over Roanoke, Virginia based Grove dealer J.W. Burress adding 12 locations in the mid-Atlantic region and taking its branch network to 69.
In 2020 a third generation of Engquists joined the senior management team when John M’s son John Engquist was appointed chief operating officer.

Finally in 2021 the company sold its crane business to Manitowoc for $130 million and disposed of its last remaining Komatsu dealership in order to focus purely on the rental business.