H&E Equipment Services entered into a definitive agreement to sell its crane business to a wholly-owned subsidiary of The Manitowoc Company for $130 million in cash. The transaction is expected to close during Q4/21, subject to customary closing conditions, including regulatory approval under the Hart-Scott-Rodino Act. According to Manitowoc, the transaction will be funded by a combination of cash on hand and existing debt availability.
“This transaction marks an important step in H&E Equipment’s transition to a pure-play equipment rental company,” Brad Barber, CEO of H&E Equipment Services, said. “We expect our continued migration to higher margin rentals will promote our strategic focus on geographic expansion and fleet investment, drive outsized revenue and profitability growth and enable us to take full advantage of opportunities created by favorable industry and macro trends.”
“H&E has a long history and excellent reputation for serving the lifting industry, and we look forward to welcoming the H&E crane team to Manitowoc,” Aaron H. Ravenscroft, president and CEO of The Manitowoc Company, said.
As a result of the transaction, H&E will fully exit the crane distribution business. In addition, this divestiture, which was unanimously approved by H&E’s board of directors, is expected to increase and further stabilize the company’s EBITDA margin as it intensifies its focus on the equipment rental business.
H&E’s equipment rental business has experienced a compound annual growth rate of 11% in the five years leading up to 2020. This growth helped the rental portion of H&E’s business expand from 32% of revenues 10 years ago to 51% in 2020.
For Manitowoc, the acquisition will expand its ability to provide rentals, new sales, used sales, aftermarket parts and service to a variety of end market customers. H&E’s crane business operates with 11 branch locations.
“Over the past few quarters, we have communicated that our intent is to grow through four strategic priorities, one of which is acquisitions focused on aftermarket,” Ravenscroft said. “The purchase of H&E’s crane business is the next step in our journey to grow the less cyclical part of our business. H&E has a long history and excellent reputation for serving the lifting industry, and we look forward to welcoming the H&E crane team to Manitowoc.”
“H&E has become one of the largest rental equipment companies in the U.S. by maintaining a commitment to growth,” Barber said. “The sale of our crane business to Manitowoc represents a transformative event in H&E’s continued efforts to increase its focus in the equipment rental business while positioning us for future growth opportunities. We believe Manitowoc will provide further career opportunities for our crane employees and will also continue to offer first-class service to existing crane customers.”
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