United Rentals (URI) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition aligns with a "Grow the Core" strategy, adding significant capacity in people, fleet, and real estate for long-term growth and expanding presence in over 30 states with about 160 new locations and 2,900 employees.

• The target's footprint, customer base, and fleet are highly complementary, enhancing core competencies in construction and industrial sectors and supporting market leadership.

• Cross-selling opportunities in specialty offerings are expected to drive $120 million in annual revenue synergies by year three.

• The deal supports a one-stop shop model for general and specialty rentals, strengthening the value proposition to customers.

• Cultural compatibility and shared priorities in safety and customer service are seen as key to long-term value creation and smooth integration.

Financial terms and conditions

• United Rentals will acquire H&E for $92 per share in cash, valuing the deal at approximately $4.8 billion including $1.4 billion of net debt.

• The purchase price represents a 6.9x multiple of trailing 12-month adjusted EBITDA, or 5.8x including $130 million in cost synergies and $54 million in tax benefits.

• The transaction is expected to be accretive to adjusted EPS and free cash flow in the first year post-close.

• Pro forma net leverage at closing is projected at 2.3x, with a target to reduce to 2.0x within 12 months; share repurchases are paused to prioritize deleveraging.

• Funded through a mix of new debt, ABL borrowings, and existing credit, with secured bridge financing.

Synergies and expected cost savings

• $130 million in annualized cost synergies are targeted within 24 months, mainly from corporate overhead and operational efficiencies.

• $120 million in annual cross-sell revenue synergies are anticipated by year three as H&E customers access United Rentals' specialty offerings.

• Procurement savings of about 5% are expected to benefit rental CapEx, capital intensity, and free cash flow.