(Reuters) - H&E Equipment Services Inc (HEES.O) said on Friday it would buy construction equipment rental chain Neff Corp (NEFF.N) for about $1.2 billion, including debt, doubling the number of its branches in the country.
The cash offer of $21.07 per share represents a premium of 7 percent to Neff’s Thursday close.
Neff shares were up 5.6 percent at $20.80 in morning trading, while H&E Equipment was up 5.1 percent at $21.42.
The deal, which includes debt of about $690 million, would lead to annual savings of $25 million to $30 million, the companies said in a statement.
“This agreement accelerates our stated strategy to expand our footprint across the United States,” H&E Equipment Chief Executive John Engquist said.
Baton Rouge, Louisiana-based H&E Equipment sells and rents cranes, lifts, booms and other heavy equipment to the oil-and-gas, petrochemical and mining industries.
Neff has till Aug. 20 to shop for a higher offer.
Wells Fargo Securities LLC is the financial adviser of H&E Equipment while Deutsche Bank Securities Inc and Akin Gump Strauss Hauer & Feld Llp advised Neff.
Reporting by Arunima Banerjee in Bengaluru; Editing by Shounak Dasgupta