H&E Equipment Services will exit the crane-distribution business as it sell its crane business to Manitowoc.
“This transaction marks an important step in H&E Equipment’s transition to a pure-play equipment rental company,” said Brad Barber, CEO, in a prepared statement. “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.”
The announced sale price is $130 million, which the distributor could be used for “further expansion of new facilities, investment in the rental fleet, and the delivery of a differentiated customer experience through enhanced technology capabilities.”
H&E said its equipment rental business has shown consistent growth, with a compound annual growth rate of 11 percent in the five years leading up to 2020. This rapid growth has seen the rental portion of H&E’s business expand from 32 percent of revenues 10 years ago to 51 percent in 2020. The overall demand for equipment rentals has continued to expand and has proven to be more stable and resilient to market disruptions than the distribution business.
Manitowoc said the acquisition will add to 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 full-service 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,” said Manitowoc president/CEO Aaron H. Ravenscroft in a statement. “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.”
Sources: H&E Equipment Services, and Manitowoc
