US car rental giant Hertz has scheduled the spin-off of its equipment rental subsidiary Hertz Equipment Rental Corp (HERC) into a stand-alone, publicly-traded company, for the first half of 2016.
John Tague, Hertz president and CEO, said, “We've taken a number of actions this year to drive performance and preparing the equipment rental business to operate as a stand-alone company is among the most significant.
"There are fundamental differences in the business models for vehicle versus equipment rental, and we believe the separation will enable more distinct focus on each by the respective separate management teams, as well as provide the equipment rental business with direct access to capital markets.
"Over the course of this year, we've put in place a highly capable senior management team that is ready to successfully operate and grow the equipment business, as well as run a publicly-traded company, based on decades of experience.
“The team has made significant progress, including a year-over-year 14 percent revenue increase in non-oil and gas markets in the third quarter, and we believe they are positioned to succeed in the long term.”
Larry Silber, president and chief executive officer of HERC, added, “We are confident that our separation from Hertz Global Holdings will provide us better flexibility and focus to pursue growth opportunities within our core equipment rental markets, which also will enable us to provide better value to our customers, employees, and suppliers.”
HERC has 280 company-operated branches, of which 270 are in the US and Canada, and the remaining branches are located in the UK, China and through joint venture arrangements in Saudi Arabia and Qatar.
In addition, the business operates through 14 franchisee owned branches in Greece, Iceland, Portugal, and Corsica in Europe; in Afghanistan in the Middle East; in Panama in Central America; and in Chile in South America.
In November, HERC completed the sale of the French and Spanish busines – which was acquired by French rental company Loxam.
The transaction included 60 locations in France and two in Spain. Loxam, which has 623 locations across fourteen countries, said the transaction increased its market share in the Paris area and the North and West of France, and also reinforced its Spanish network.