Rental News: Neff Corp. Sold To H&E

By Mike Osenga17 July 2017

H&E Equipment Services, Inc. Baton Rouge, La., and Neff Corp., Miami, announced that they have entered into a definitive merger agreement under which H&E Equipment Services will acquire Neff.   

Under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies, H&E will pay $21.07 in cash per share of Neff common stock, for a total enterprise value of approximately $1.2 billion, including approximately $690 million of net debt.  The transaction is expected to close in the late third quarter or early fourth quarter of 2017, and is subject to customary closing conditions including Hart-Scott-Rodino Act clearance. The transaction is not subject to a financing condition.

Private investment funds managed by Wayzata Investment Partners LLC holding approximately 62.7% of the outstanding common shares of Neff, have executed a written consent to approve the transaction, thereby providing the required stockholder approval for the transaction.

Neff has 69 branches and approximately 1160 employees, while H&E is an integrated equipment services company with 78 facilities throughout the West Coast, Intermountain, Southwest, Gulf Coast, Mid-Atlantic and Southeast regions. The acquisition will nearly double the number of H&E branches, from 78 to 147.

H&E is focused on heavy construction and industrial equipment and rents, sells and provides parts and services support for four core categories of specialized equipment: hi-lift or aerial platform equipment; cranes; earthmoving equipment; and  industrial lift trucks.

Brands listed on H&E’s website include:  Bobcat, Doosan, Gehl, Genie, Grove, JLG, Komatsu, Manitowoc, National Crane, SkyJack, SkyTrak and Takeuchi

John Engquist, H&E’s chief executive officer, said, “This agreement accelerates our stated strategy to expand our footprint across the United States as we seek to penetrate and grow our business in strategic business segments. Further, this transaction will bring together what we believe to be two highly complementary businesses that share a commitment to addressing the increasingly complex equipment needs of our customers.”

As of March 31, 2017, the companies’ combined fleet totaled $2.2 billion based on original equipment cost (OEC) and consisted of 43,749 units. The companies said the addition of Neff’s fleet will be complementary to H&E’s concentration in aerial work platform equipment.

H&E estimates the acquisition will create $25 to $30 million of synergies annually related to corporate overhead, systems and operational efficiencies, as well as scale benefits for equipment purchases.   

The merger agreement includes a “go-shop” period which runs through August 20, 2017 during which the special committee of Neff’s board of directors, with the assistance of its financial and legal advisors, may solicit alternative proposals to acquire Neff.

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