H&E Equipment Services will be leaving the crane distribution business as it is selling its crane business to Manitowoc.
“This transaction is an important step in H&E Equipment’s transition to an equipment-only rental company,” said Brad Barber, CEO, in a prepared statement. “We anticipate that our continued migration to higher margin rentals will fuel our strategic focus on geographic expansion and fleet investments, fuel above-average revenue and profitability growth, and enable us to leverage opportunities created by favorable industry and macro trends to be fully exploited. “
The announced retail price is $ 130 million, which the distributor could use to “further expand new facilities, invest in the rental fleet and deliver a differentiated customer experience through enhanced technology capabilities.”
H&E said its equipment rental business has shown steady growth, with an average annual growth rate of 11 percent for the five years to 2020. That rapid growth has resulted in H & E’s rental share from 32 percent of sales 10 years ago to 51 percent in 2020. Overall demand for equipment rental has continued to grow and has proven to be more stable and resilient to market disruptions than the distribution business.
Manitowoc said the acquisition will increase its ability to provide rentals, new sales, used sales, aftermarket parts and services to a wide variety of end-market customers. H & E’s crane business has 11 full-service branches.
“Over the past few quarters we have announced that we are growing through four strategic priorities, one of which are aftermarket acquisitions,” said Aaron H. Ravenscroft, President / CEO of Manitowoc, in a statement. “The purchase of H & E’s crane business is the next step on our way to growing the less cyclical part of our business. H&E has a long history and excellent reputation for the lifting industry and we look forward to welcoming the H&E crane team to Manitowoc. “
Sources: H&E Equipment Services and Manitowoc