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The transaction supports the transformation of H&E into a pure equipment rental company
Will drive H & E’s strategic focus on geographic expansion and fleet investments
H&E will hold a conference call to discuss the transaction
BATON ROUGE, La. – (BUSINESS WIRE) – H&E Equipment Services, Inc. (NASDAQ: HEES) (“H&E”) announced today that it has entered into a definitive agreement to sell its crane business to a wholly-owned subsidiary of The Manitowoc Company, Inc. (NYSE: MTW), a leading global manufacturer of cranes and lifting solutions, for $ 130 million in cash. The transaction is expected to close in the fourth quarter of 2021, subject to customary closing conditions, including regulatory approval under the Hart-Scott-Rodino Act.
“This transaction is an important step in H&E Equipment’s transition to an equipment-only rental company,” said Brad Barber, chief executive officer of H&E. “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. ”
“H&E has a long history and reputation for the lifting industry, and we look forward to welcoming the H&E crane team to Manitowoc,” said Aaron H. Ravenscroft, President and Chief Executive Officer of The Manitowoc Company, Inc. on the transaction H&E will withdraw completely from the crane sales business.
This sale, unanimously approved by H & E’s board of directors, is expected to increase and further stabilize the company’s EBITDA margin as it increases its focus on the higher margin equipment rental business.
The H&E equipment rental business has grown steadily, with an average annual growth rate of 11 percent for the five years to 2020. This rapid growth has resulted in the rental share of the H&E business increasing from 32 percent of sales 10 years ago to 51 percent in 2020. The 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.
Possible uses of the proceeds from the transaction include the further expansion of new facilities, investments in the rental fleet and the provision of a differentiated customer experience through improved technology capabilities. In addition, the proceeds will strengthen the company’s strong liquidity position while supporting strategic growth initiatives and ongoing dividends.
H&E Equipment Services will host a conference call and live webcast on July 20, 2021 at 11:00 a.m. Eastern Time to discuss the announced transaction. Interested parties can join the conference call by dialing 1-844-887-9400 or by visiting the Investor Relations section of the company’s website at www.he-equipment.com. A recording of the call will be available after 1:00 p.m. Eastern Time on July 20, 2021 and can be accessed by calling 1-877-344-7529 and entering the conference code 10158870. The call will remain active through August 3, 2021. A replay of the webcast will remain active on the company’s website for 30 days.
About H&E Equipment Services
The company is one of the largest integrated equipment services companies in the United States with 105 full-service facilities in the West Coast, Intermountain, Southwest, Gulf Coast, Mid-Atlantic, and Southeastern United States. Focused on heavy construction and industrial equipment, the company rents, sells, and provides parts and service support for four core categories of specialty equipment: (1) aerial platform or aerial platform equipment; (2) cranes; (3) earth moving equipment; and (4) material handling equipment. By providing equipment rental, sales and on-site parts, repair and maintenance functions under one roof, the company is a one-stop provider for the diverse equipment needs of its customers. This full-service approach offers the company several customer contact points that enable it to maintain a high-quality rental fleet as well as an effective sales channel for fleet disposal and offers cross-selling opportunities between the sale of new and used equipment, rental and parts sales and service.
About The Manitowoc Company, Inc.
The Manitowoc Company, Inc. was founded in 1902 and has a 118-year history of providing high quality, customer-centric products and support services to its markets. Manitowoc is one of the world’s leading providers of technical lifting solutions. Manitowoc designs, manufactures, markets and supports, through its wholly-owned subsidiaries, extensive lines of mobile hydraulic cranes, tower cranes, lattice boom crawler cranes and boom trucks under the Grove, Manitowoc, National Crane, Potain and Shuttlelift brands.
Certain statements contained herein are “forward-looking statements” within the meaning of the federal securities laws. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Statements containing the words “may”, “could”, “would”, “should”, “believe”, “expect”, “anticipate”, “plan”, “estimate”, “aim”, “project”, “intend” ““ And similar expressions constitute forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. These factors include, but are not limited to, failure to obtain, delays in obtaining, or adverse conditions contained in any required regulatory or other approvals, including antitrust approvals; Failure to complete or delay in closing the Transaction for any other reason and other factors discussed in our public filings, including the risk factors contained in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Investors, prospective investors and other readers are urged to consider these factors carefully in evaluating any forward-looking statements and not to place undue reliance on such forward-looking statements. Except as required by applicable law, including the United States securities laws and the rules and regulations of the Securities and Exchange Commission, we have no obligation to publicly update or revise any forward-looking statements after the date of this publication.
Leslie S. Magee
Jeffrey L. Chastain
Vice President for Investor Relations
Source: H&E Equipment Services, Inc.