Herc Holdings: Buying Market Share At An Expensive Price

2025-03-17 16:30:57 ET

Summary

• Herc Holdings Inc has blocked the United Rentals acquisition of H&E Equipment Services and will increase its market share.
• The company is paying an expensive price, and debt is reaching dangerous levels.
• If the economy slows down, Herc Holdings could find itself in a tough situation.
• Expected synergies are optimistic, and the stock is trading above its fair value. I rate Herc Holdings as a sell, assigning it a fair price of $115 per share.

Introduction

The rental equipment industry is consolidating, and H&E Equipment Services ( HESS ) is currently at the center of a bidding war.

After United Rentals ( URI ) issued an offer to acquire H&E Equipment and increase its already large market share, Herc Holdings Inc. ( HRI ) proposed a merger agreement at an even higher price. ...

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