H&E Equipment Services sold its crane business to Manitowoc for $ 130 million in cash. This is an “important step” on the way to becoming a pure rental company.
“We anticipate that our continued move to higher margin rentals will fuel our strategic focus on geographic expansion and fleet investments, fuel above-average sales and profitability growth, and enable us to leverage the opportunities created by favorable industry and macro trends to take full advantage, ”said Brad Barber, Chief Executive Officer of H&E.
The sale, unanimously approved by the H&E board, is intended to increase and further stabilize the company’s EBITDA margin as it focuses on the higher-margin equipment rental business.
H&E says its rental business has grown steadily at an average annual growth rate of 11% for the five years to 2020. This growth has resulted in the company’s rental share increasing from 32% of sales 10 years ago to 51%. in 2020.
According to H&E, 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”.
The possible use of the sales proceeds includes the further expansion of new facilities, investments in rental fleets and expanded technology capacities. The company also says the proceeds will bolster its strong liquidity position while supporting strategic growth initiatives.