United Rentals Pauses Share Buybacks After $4.8 Billion H&E Acquisition

Deal News | Jan 14, 2025 | EIN

United Rentals Pauses Share Buybacks After $4.8 Billion H&E Acquisition

United Rentals, a leader in the equipment rental industry and an S&P 500 component, announced a significant acquisition of H&E Equipment Services for a total of $4.8 billion, including $1.4 billion in debt. This strategic move is aimed at expanding its core business and increasing shareholder value. United Rentals plans to initiate a tender offer for H&E common stock at $92 per share and complete the acquisition through a second-step merger if required. The transaction is anticipated to close in the first quarter of the year. URI has temporarily halted its share repurchase program to manage leverage after the deal but will maintain its dividend program. The acquisition is projected to result in $130 million in annualized cost synergies within two years. Following the announcement, United Rentals and H&E Equipment Services stocks saw significant increases.

Sectors

  • Equipment Rental
  • Construction Equipment
  • Corporate Finance

Geography

  • United States – Both United Rentals and H&E Equipment Services operate primarily within the United States.

Industry

  • Equipment Rental – The acquisition involves United Rentals, a leading company in the equipment rental sector, expanding its reach within this industry.
  • Construction Equipment – H&E Equipment Services is a key player in the construction equipment sector, which overlaps with the rental industry.
  • Corporate Finance – The transaction includes financial strategies such as bridge commitment loans and stock repurchase planning.

Financials

  • 4.8 billion – The total acquisition value of H&E Equipment Services by United Rentals.
  • 1.4 billion – The portion of H&E Equipment Services' debt included in the acquisition value.
  • 92 – The cash per share offer for H&E common stock in the tender offer.
  • 130 million – The expected annualized cost synergies from the acquisition within two years.
  • 1.125 billion – Amount repurchased by United Rentals of its own stock through Q3 2024.
  • 326 million – Total dividends paid by United Rentals in 2024.
  • 375 million – Shortfall in United Rentals' share repurchase plan for 2024 due to the pause.

Participants

NameRoleTypeDescription
United RentalsBidding CompanyCompanyA leading equipment rental company that is acquiring H&E Equipment Services.
H&E Equipment ServicesTarget CompanyCompanyA firm specializing in the sale and rental of construction equipment, being acquired by United Rentals.
Matthew FlanneryChief Executive of United RentalsPersonCEO of United Rentals who commented on the strategic aspects of the acquisition.