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February 18, 2025

CT company gets scooped in merger agreement with rival

Contributed United Rentals has its Stamford headquarters at First Stamford Place
By Harriet Jones

Stamford-based equipment rental giant United Rentals has backed out of a $4.8 billion deal to acquire H&E Equipment Services, after H&E received a higher offer from a rival bidder.

The two had announced a merger agreement Jan. 14. The deal included a so-called “go-shop” clause, allowing H&E to seek other bids for a limited period.

H&E accepted a bid from Florida-based Herc Rentals, which values the company at almost $5.3 billion, including $1.4 billion of net debt. 

United Rentals has declined to make a counter offer.

“One of our key responsibilities as a management team is to be good stewards of our investors’ capital and our decision not to increase our offer for H&E reflects our commitment to financial discipline,” said Matthew Flannery, CEO of United Rentals, in a statement. “We will continue to follow our well-proven strategy focused on profitable growth, strong free cash flow generation and prudent capital allocation to drive compelling long-term value for our shareholders.”

Under the terms of the original agreement, H&E is required to pay a termination fee of approximately $63.5 million to United Rentals. 

“We are pursuing the proposed combination with H&E from a position of strength and view it as a path to accelerate Herc’s strategy and growth trajectory,” said Herc CEO Larry Silber, announcing the counter bid. “Herc has tremendous respect for H&E and the high quality of the platform and customer centric culture of the organization. This combination would strengthen Herc’s position as a premier rental company in North America.”

The deals reflect ongoing consolidation in the sector, which is seeing increased demand for industrial equipment from commercial construction firms, boosted in part by an injection of government cash from the Infrastructure Investment and Jobs Act.
 

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