H&E Equipment Services ( HEES , Financials ) stock soared 105.7% to $90.38 as of 12:41 p.m. GMT-5 following the announcement that United Rentals ( URI , Financials ) will acquire the company in a deal valued at $4.8 billion, including $1.4 billion in net debt.

The boards of both firms have unanimously authorized the transaction for $92 per share in cash. Operating 160 stores across 30 U.S. states and managing a $2.9 billion rental fleet, H&E Equipment Services reported in the statement $1.518 billion in sales and $696 million in adjusted EBITDA for the 12 months ended Sept. 30, 2024.

United Rentals said the deal fits their expansion plan and increases their fleet by 64,000 units. Within two years it also forecasts $130 million in annual cost savings and $120 million in cross-sell synergies by year three. The personnel of H&E will be included into the merger, with aims to increase efficiency and provide fresh commercial prospects. Additionally included in the H&E Equipment Services statement was this material.

As the announcement notes, United Rentals has received bridge commitments and intends to combine fresh debt issuing with existing credit capacity to fund the transaction. After the deal, United Rentals hopes for its leverage to drop to 2.0x EBITDA in twelve months.

The deal calls for a 35-day "go-shop" period when H&E may request other proposals. Still, the company's statement makes no guarantees of a better plan. Subject to legislative clearances and other usual requirements, the agreement is scheduled to finalize in the first quarter of 2025.

This article first appeared on GuruFocus .