H&E Equipment Services expands into the Midwest with One Source acquisition
By Larry StewartSeptember 28, 2022
H&E Equipment Services is set to acquire One Source Equipment Rentals for $130 million.
Founded in 2001, One Source is an employee-owned business based in Plainfield, Ill., with revenues of $59 million. For the 12 months ended in July, the company generated about $59 million in revenues with a fleet value, measured by original equipment cost, of approximately $138 million. One Source has ten branches: three in Illinois, three in Indiana, two in Tennessee and one each in Kentucky and Alabama.
The deal is expected to close during the fourth quarter of 2022.
“For more than 20 years, One Source has emphasized a culture where equipment reliability and customer support and satisfaction are vital features for success, resulting in an equipment rental operation with strong consumer loyalty throughout its branch network,” said Brad Barber, CEO of H&E. “These important attributes, which are underscored by a dedicated base of employee owners, offer an exceptional cultural fit with H&E.
“Also, the transaction will expand our geographic footprint into the Midwest with operations in Illinois and Indiana, as well as operations in Kentucky.”
He added that the H&E was expanding through “warm start” – meaning acquisitions – and greenfield branch openings, with 15 new branches established since early 2021.
With the close of the One Source transaction, H&E’s equipment rental operations will extend across 117 locations in 28 states.
H&E closed its second quarter on June 30, reporting $295 million in revenues, 11% greater than the second quarter of 2021. Total equipment-rental revenues jumped nearly 30% to $228 million, on equipment-rental gross margins of 49%.
“Rental rates closed the quarter at an impressive 9.4% better than the year-ago quarter and showed a 3.5% gain over the first quarter of 2022,” said Barber. “With high demand for our rental fleet, average physical utilization closed the quarter at 73.2%, or 450 and 280 basis points better when compared to the second quarter of 2021 and the previous quarter in 2022, respectively.”