Car rental company Hertz said its equipment rental subsidiary, Hertz Equipment Rental (HERC), would be spun-off in an initial public offering (IPO) and begin trading as a separate entity on 1 July.
The move has been on the cards for some time, with HERC readying itself for the IPO over the last 12 months – preparations that included the sale of its French and Spanish businesses.
Hertz is also listing itself as a separate public company as part of the transaction under the name Hertz Global Holdings, Inc. HERC will be known as HERC Holdings Inc.
On 1 July, the new Hertz Global Holdings will begin trading on the New York Stock Exchange under the existing HTZ symbol, while HERC Holdings will begin trading on the under the symbol HRI.
"The creation of these two public companies enables each to focus on their respective core businesses, thereby increasing the opportunity for both to create optimal shareholder value," said John Tague, president and CEO of Hertz Global Holdings, who will continue in the same role at the new Hertz Global Holdings following the transaction.
"This separation marks the culmination of considerable work by our leadership team over the past 12 months. While developing and implementing a multi-year margin improvement plan for our rental car business, we installed a strong, experienced management team at HERC and worked with them to strengthen the fundamentals of its equipment rental business.
“We recently completed the selection of an experienced board of directors and facilitated creation of a capital structure with the requisite financing to support the business. Both businesses are now well-positioned to realize their full potential."
The HERC Holdings board will be led by non-executive chairman Herbert Henkel, while current president and CEO of HERC Larry Silber also be president and CEO of the independent company.
"As a leader in the equipment rental industry, our separation as an independent company enables us to focus on opportunities to expand our business and enhance profitability," Mr Silber said.
"We are already making good progress and continue to execute a solid business plan and strategy designed to enhance customer service, expand and diversify our revenues and improve operating efficiencies to generate value for our shareholders."