H&E Equipment is to acquire its US counterpart Neff Corporation in a US$1.2 billion (€1.05 billion) deal, the companies have announced.
Under the agreement, H&E will pay US$21.07 (€18.41) per share in cash, which will include approximately US$690 million (€602.80 million) of net debt. The transaction is expected to close in the third quarter of 2017.
The acquisition will nearly double the number of H&E branches, from 78 to 147, within H&E’s existing footprint in the Gulf Coast, Mid-Atlantic, Southeast and West Coast regions. The companies said that both H&E’s and Neff’s customers would benefit from best-in-class practices and a wide range of equipment in more locations.
As of 31 March, the companies’ combined fleet totalled US$2.2 billion (€1.92 billion) based on original equipment cost (OEC) and consisted of 43749 units.
The companies said that the addition of Neff’s fleet would be highly complementary to H&E’s concentration in aerial work platform equipment and that the combined company would possess one of the largest earthmoving rental fleets in the industry.
As of 31 March, the earthmoving fleet of H&E and Neff on a combined OEC basis totalled US$727 million (€635.13 million) and consisted of 8736 units. H&E and Neff added that the increased geographic expansion and density was expected to allow H&E to better position fleet to regional pockets of higher demand and improve overall utilization.
John Engquist, H&E’s CEO, said, “This agreement accelerates our stated strategy to expand our footprint across the US as we seek to penetrate and grow our business in strategic business segments.
“Further, this transaction will bring together what we believe to be two highly complementary businesses that share a commitment to addressing the increasingly complex equipment needs of our customers.”
Mr Engquist added that the company’s broader geographic footprint and enhanced capabilities in strategic markets, coupled with complementary expertise across equipment categories, were expected to help it to achieve its growth goals.
He said H&E looked forward to welcoming Neff’s talented employee base to the H&E family, and to offering more coverage and capabilities to support its combined customer base.”
Meanwhile, Graham Hood, CEO of Neff Corp, said, “We are looking forward to joining an industry leader who shares our core values, including our commitment to providing customers with best-in-class equipment services and solutions.
“Neff offers H&E a talented, experienced and knowledgeable employee base that we expect will continue to maintain and develop relationships with key customers and contribute to the combined company’s growth.”
Mr Hood added his thanks to the company’s 1160 employees across the country, who he said were the driving force behind its business.