Herc Holdings Successfully Completes H&E Equipment Acquisition with Strong Shareholder Support

The equipment rental industry witnessed a significant consolidation milestone as Herc Holdings Inc. (NYSE: HRI) successfully closed its acquisition of H&E Equipment Services, Inc. (NASDAQ: HEES) on June 2, 2025. The transaction, which combined two major players in the equipment rental sector, was preceded by a competitive tender offer process that demonstrated robust shareholder backing and marked a transformative moment for both companies and the broader market.

H&E Equipment Share Exchange Achieves Strong Adoption Rate

The tender offer for H&E Equipment common stock concluded on May 29, 2025, with approximately 69.33% of outstanding shares—totaling 25,369,090 shares—validly tendered by shareholders. Under the merger agreement dated February 19, 2025, each H&E Equipment share was exchanged for $78.75 in cash plus 0.1287 shares of Herc common stock. This exchange rate structure attracted substantial institutional participation and signaled confidence from H&E Equipment shareholders in the combined entity’s prospects. The completion of the tender offer paved the way for the final merger step, where all remaining H&E Equipment shares were converted into the equivalent consideration through the statutory merger process, as contemplated in the original merger agreement.

Following the finalization on June 2, 2025, H&E Equipment ceased trading on the Nasdaq Stock Market and transitioned into a wholly-owned subsidiary structure within Herc Holdings. HR Merger Sub Inc., the merger subsidiary created specifically for this transaction, merged with H&E Equipment, completing the integration from a corporate structure perspective.

Market Implications and Operational Integration

The acquisition of H&E Equipment substantially expanded Herc Holdings’ market footprint and operational capabilities. As of 2024, Herc reported total revenues of approximately $3.6 billion across its 453 rental locations throughout North America. H&E Equipment, founded in 1961, operated throughout multiple high-growth geographies including the Pacific Northwest, West Coast, Intermountain, Southwest, Gulf Coast, Southeast, Midwest, and Mid-Atlantic regions, with a diverse fleet encompassing aerial work platforms, earthmoving equipment, material handling machinery, and specialty equipment lines.

The combined platform realized significant economies of scale through unified procurement, operational streamlining, and cross-regional service optimization. Herc’s ProSolutions offering—which provides industry-specific solutions in power generation, climate control, remediation, pumps, and trench shoring—gained additional geographic reach through H&E Equipment’s established branch network. The integration positioned the combined entity as a comprehensive equipment rental solution provider with enhanced capacity to serve large national contractors and regional customers alike.

The merger eliminated redundant administrative functions and consolidated customer relationship management across overlapping service territories. Approximately 7,600 Herc employees, supplemented by H&E Equipment’s workforce, now operate the enlarged platform, creating opportunities for career advancement and skill-sharing across the combined organization.

Institutional Investor Activity and Market Response

The completion of the H&E Equipment acquisition attracted significant attention from institutional investors, with notable portfolio movements recorded in the first quarter of 2025 and surrounding periods:

• Clearbridge Investments entirely exited their position, liquidating 2,119,455 shares (valued at approximately $200.9 million)
• Pentwater Capital Management initiated a substantial new position with 1,650,000 shares (approximately $156.4 million investment)
• Macquarie Group Ltd. reduced exposure by 72.9%, selling 1,634,309 shares (approximately $154.9 million)
• American Century Companies decreased their stake by 45.9%, representing approximately $92.8 million in share sales
• Balyasny Asset Management made a significant addition of 685,193 shares (approximately $64.9 million), indicating renewed conviction in post-merger prospects

Overall, 156 institutional investors increased their positions in the combined entity during Q1 2025, while 162 institutional investors decreased holdings, reflecting a mixed but actively engaged institutional response to the transaction.

Risk Factors and Integration Challenges

While the acquisition promised significant strategic benefits, Herc Holdings management acknowledged material risks that required careful navigation. Successful integration of H&E Equipment’s business operations—encompassing thousands of employees, established customer relationships, and geographically dispersed operations—presented execution challenges. Key integration risks included potential disruption of customer relationships, retention of key personnel at H&E Equipment, maintenance of supplier partnerships, and achievement of projected synergies.

The transaction introduced potential unexpected costs and contingent liabilities that might emerge post-closing. The combined company faced typical post-merger challenges including accounting integration, tax optimization, and potential unforeseen obligations not identified during due diligence. Additionally, the substantial debt load necessary to finance the transaction and refinance existing obligations required careful management to maintain financial flexibility.

Market and economic uncertainty, changes in the equipment rental industry dynamics, and potential slowdowns in construction and industrial activity could impact the combined entity’s ability to achieve projected financial performance and revenue synergies. Competition from other major equipment rental platforms remained an ongoing concern in a consolidating industry.

Company Profiles and Strategic Positioning

Herc Holdings Inc. operates through its Herc Rentals Inc. subsidiary as a full-line rental supplier, offering aerial equipment, earthmoving machinery, material handling solutions, trucks and trailers, air compressors, compaction equipment, and lighting systems. The company’s ProSolutions brand extends beyond equipment rental into comprehensive service offerings across multiple industrial verticals. Operating 453 North American locations prior to the H&E Equipment acquisition, Herc employed approximately 7,600 team members dedicated to enabling customers to work efficiently, effectively, and safely.

H&E Equipment Services, founded in 1961, established itself as one of the nation’s largest equipment rental operators. The company built extensive regional presence and developed deep relationships within high-growth markets throughout multiple U.S. regions. H&E Equipment’s focus on diverse end markets and equipment specialization created attractive acquisition characteristics and complementary capabilities for the Herc platform.

For additional information about Herc Holdings and the combined organization, interested parties can visit www.HercRentals.com or contact Senior Vice President of Investor Relations Leslie Hunziker at leslie.hunziker@hercrentals.com or (239) 301-1675.