09:01 AM EST, 01/14/2025 (MT Newswires) -- United Rentals ( URI ) has agreed to acquire H&E Equipment Services ( HEES ) in an all-cash deal worth roughly $4.8 billion, including about $1.4 billion of debt, as the equipment rental company aims to expand its capacity in the US.

Under the terms of the deal, United Rentals ( URI ) aims to launch a tender offer by Jan. 28 to acquire all shares of H&E for $92 apiece in cash, the companies said in a joint statement Tuesday. United Rentals ( URI ) plans to acquire all the remaining shares not tendered in the offer through a second-step merger at the same price. H&E's stock soared 106% in premarket activity, while United Rentals ( URI ) gained 4%.

H&E, which serves the construction and industrial markets through 160 branches across 30 US states, has about 2,900 employees and $2.9 billion of rental fleet at original cost. United Rentals ( URI ) expects the deal to enhance its capacity in key US markets and increase its rental fleet by almost 64,000 units.

"This purchase of H&E supports our strategy to deploy capital to grow the core business and drive shareholder value," United Rentals ( URI ) Chief Executive Matthew Flannery said in a statement. "This acquisition allows us to better serve our customers with expanded capacity in key markets while also providing the opportunity to further drive revenue through our proven cross-selling strategy."

The deal, which requires a minimum tender of at least a majority of H&E shares, is expected to be completed in the ongoing quarter. The deal also includes a 35-day "go-shop" period until Feb. 17 during which H&E can terminate the agreement in favor of a superior alternative acquisition proposal.

"I couldn't be more pleased with this win-win outcome for both organizations, our customers and our shareholders," H&E Executive Chairman John Engquist said. "I am confident that we've found an excellent landing spot for them and I am excited for the new opportunities they will have as part of United Rentals ( URI )."

The companies project the deal to be accretive to United Rentals' ( URI ) per-share adjusted earnings and free cash flow in the first year after completion. The deal is anticipated to generate about $130 million of annualized cost synergies within 24 months of completion, mainly in the corporate overhead and operational areas. United Rentals ( URI ) also sees $120 million of annual revenue cross-sell synergies by the third year.

United Rentals ( URI ) expects to fund the transaction through a mix of newly issued debt, borrowings and available capacity under its asset-based lending facility. The company doesn't expect the deal to impact its current dividend program.

The company plans to update its 2025 outlook to reflect the deal after its completion.