H&E Equipment Services to Acquire Contractors Equipment Center; Will Significantly Expand Presence in Colorado Market
November 21 2017 - 9:30AM
Business Wire
H&E Equipment Services, Inc. (NASDAQ: HEES) today announced
its entry into a definitive agreement to acquire Contractors
Equipment Center (CEC), a non-residential construction focused
equipment rental company located in the greater Denver, Colorado,
area. Under the terms of the agreement, H&E is expected to pay
approximately $122.4 million in cash for CEC, subject to customary
adjustments. The transaction is expected to close in the late
fourth quarter of 2017, and is subject to customary closing
conditions including Hart-Scott-Rodino Act clearance.
John Engquist, H&E’s Chief Executive Officer, said, “From
every perspective, we believe CEC meets the strict criteria we
demand for every acquisition. CEC is a long-term proven operator
that has delivered solid operational and financial results and
possesses a highly-experienced management team and employee base,
which also shares our culture for best-in-class commitment to
customer service and safety. As of September 30, 2017, CEC
generated revenues of approximately $34.0 million for the last
twelve months and its fleet size based on original equipment cost
was $84.0 million. With the addition of CEC, we will double our
branch count to six in Colorado, significantly expanding our
presence in a high-growth construction market. CEC’s end-user
markets and fleet mix are also highly complementary to our existing
business. We welcome CEC’s employees to the H&E family. We are
actively evaluating acquisitions similar to CEC that align with our
growth strategy and expand our operations.”
Greg Harrington, President of CEC, commented, “This acquisition
is a significant compliment to everyone at CEC and validates our
hard work and success in the construction markets we serve in
Colorado. By joining H&E, we become part of an industry-leading
integrated equipment services company with the scale to better
serve our existing customers and further expand our presence in the
vibrant Denver and surrounding markets. We believe our employees
will also benefit from broader further career advancement
opportunities.”
Dechert LLP acted as legal advisor to H&E. Catalyst
Strategic Advisors acted as exclusive financial advisor to CEC, and
Holland & Hart LLP acted as exclusive legal advisor to CEC.
About H&E Equipment Services, Inc.
The Company is one of the largest integrated equipment services
companies in the United States with 80 full-service facilities
throughout the West Coast, Intermountain, Southwest, Gulf Coast,
Mid-Atlantic and Southeast regions. The Company is focused on heavy
construction and industrial equipment and rents, sells and provides
parts and services support for four core categories of specialized
equipment: (1) hi-lift or aerial platform equipment; (2) cranes;
(3) earthmoving equipment; and (4) industrial lift trucks. By
providing equipment rental, sales, on-site parts, repair and
maintenance functions under one roof, the Company is a one-stop
provider for its customers' varied equipment needs. This full
service approach provides the Company with multiple points of
customer contact, enabling it to maintain a high quality rental
fleet, as well as an effective distribution channel for fleet
disposal and provides cross-selling opportunities among its new and
used equipment sales, rental, parts sales and services
operations.
Forward-Looking Statements
Statements contained in this press release that are not
historical facts, including statements about H&E’s beliefs and
expectations, 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”, “target”, “project”, “intend”, “foresee” and
similar expressions constitute forward-looking statements.
Forward-looking statements involve known and unknown risks and
uncertainties, which could cause actual results to differ
materially from those contained in any forward-looking statement.
Such factors include, but are not limited to, the following: (1)
the risk that any savings and synergies anticipated from the
acquisition are not realized or take longer than anticipated to be
realized; (2) the occurrence of any event, change or other
circumstances that could give rise to the termination of the
purchase agreement, the failure of the closing conditions included
in the purchase agreement to be satisfied (or any material delay in
satisfying such conditions), or any other failure to consummate the
transactions contemplated thereby; (3) the risk of unsuccessful
integration of H&E’s and CEC’s businesses, or that such
integration will be materially delayed or will be more costly or
difficult than anticipated; (4) the amount of the costs, fees,
expenses and charges related to the acquisition; (5) the ability to
obtain required governmental approvals of the proposed merger,
including approval under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976; (6) any additional costs related to the
acquisition or the other transactions contemplated thereby as a
result of unexpected factors or events; (7) any negative effects of
this announcement or the consummation of the acquisition on
H&E's or CEC's supplier, customer or other business
relationships or the market price of H&E’s common stock or
other securities; (8) the diversion of management time on
transaction-related issues; (9) other business effects, including
the effects of general industry, market, economic, political or
regulatory conditions, future exchange or interest rates or changes
in tax laws, regulations, rates and policies, including the
uncertainty regarding rules and regulations with respect to the
foregoing that may be affected by the United States Congress and
Trump administration; (10) the expected business outlook,
anticipated financial and operating results of H&E generally;
and (11) other factors discussed in our public filings, including
the risk factors included in the H&E’s most recent Annual
Report on Form 10-K. Investors, potential investors and other
readers are urged to consider these factors carefully in evaluating
the forward-looking statements and are cautioned not to place undue
reliance on such forward-looking statements. Except as required by
applicable law, including the securities laws of the United States
and the rules and regulations of the Securities and Exchange
Commission, we are under no obligation to publicly update or revise
any forward-looking statements after the date of this release.
These statements are based on the current beliefs and assumptions
of H&E’s and, as applicable, CEC’s management, which in turn
are based on currently available information and important,
underlying assumptions. H&E is under no obligation to publicly
update or revise any forward-looking statements after this press
release, whether as a result of any new information, future events
or otherwise. Investors, potential investors, security holders and
other readers are urged to consider the above mentioned factors
carefully in evaluating the forward-looking statements and are
cautioned not to place undue reliance on such forward-looking
statements. Although H&E and CEC believe that the expectations
reflected in the forward-looking statements are reasonable, they
cannot guarantee future results or performance, including the
consummation of the transactions contemplated by the purchase
agreement or any anticipated effects of the acquisition.
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version on businesswire.com: http://www.businesswire.com/news/home/20171121005323/en/
H&E Equipment Services, Inc.Leslie S. Magee,
225-298-5261Chief Financial Officerlmagee@he-equipment.comorKevin
S. Inda, 225-298-5318Vice President of Investor
Relationskinda@he-equipment.com
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