M&A Report: Louisiana M&A activity declines for second consecutive year

G.F. Gay Le Breton and Liam Norton, Chaffe & Associates Inc.

https://bit.ly/Chaffe-CB-Jan25

M&A activity in Louisiana started 2025 with a bang when Baton Rouge-based H&E Equipment Services agreed on January 13^th to sell to United Rentals, Inc. for $3.4 billion.  United Rentals will acquire H&E for $92 per share in cash, plus the assumption of approximately $1.4 billion in net debt, reflecting a total enterprise value of approximately $4.8 billion.

H&E Equipment Services, one of Louisiana’s few publicly traded companies, is a leading provider of general and specialty equipment rentals, serving a diverse mix of customers across construction and industrial markets.  Founded in 1961, the company has approximately 2,900 employees, and $2.9 billion of rental fleet at original cost, with more than 160 branches in 31 states.  In recent years, H&E has concentrated on equipment rental, selling off its crane business in 2021 and its earthmoving distributorships in 2022, and buying smaller equipment companies in the Midwest and West. 

United Rentals is the largest equipment rental company in the world. It has nearly 1,600 locations in North America, Europe and Australia, and a fleet valued at $21.9 billion.  The transaction is consistent with United Rental’s “grow the core” strategy.

Brad Barber, CEO of H&E Equipment Services, stated, “I’m extremely proud of what we’ve built at H&E over the last 60 years and am confident that our combination with United Rentals will take the business to new heights going forward.”

The deal’s $4.8 billion price tag represents a ~6.9x multiple on Sep. 30, 2024 TTM adjusted EBITDA, and is expected to be accretive to United’s earnings in its first year post-close.  Including $130 million of targeted cost synergies, the deal is 5.8x adjusted EBITDA.

Matthew Flannery, CEO of United Rentals, expressed enthusiasm about the acquisition, stating, “In H&E we’re acquiring a well-run operation that’s primed to benefit from our technology, operations and broad value proposition. Most importantly, we’re gaining a great team that shares our intense focus on safety and customer service. We’ll be working side-by-side throughout the integration to capitalize on best-in-class expertise from both sides.” The transaction is expected to close by the end of the first quarter 2025.

In other January news, New Orleans-based Sazerac Company made headlines with its acquisition of the Svedka vodka brand from Constellation Brands for $409.2 million. Sazerac, a prominent player in the global spirits industry, is known for its extensive portfolio of brands, including Buffalo Trace bourbon and Southern Comfort. The Svedka deal was listed as one of the Top 10 Spirits Acquisitions of 2024 by The Sprits Business, an international trade publication.

Jake Wenz, CEO of Sazerac, commented, “The team at Constellation has built the Svedka brand over the years to be known for its high-quality vodka-making traditions, premium liquid standards, and flavor innovation. We are honored for this opportunity and excited to add Svedka to our global spirits portfolio.” This deal is in line with Constellation’s strategy to focus on higher-end wine and spirits brands. Originally announced in December 2024, the deal closed on January 6, 2025. 

In the healthcare sector, Renovus Capital Partners announced its acquisition of Superior Health Holdings, Inc., a provider of home health and hospice services based in Baton Rouge. Financial terms of the January transaction were not announced.

Superior Health, formed in 2021, operates eight home health and hospice brands serving 30 Louisiana parishes. The company provides a range of services, including skilled nursing care, therapy services, and home health aides. Led by CEO David Martin, the company has grown both organically and through strategic acquisitions. The investment by Renovus Capital will help the provider to expand its reach and plan new strategic initiatives,

David Martin expressed optimism about the partnership with Renovus, emphasizing, “We are excited to partner with the seasoned and accomplished team at Renovus as we look forward to bringing Superior’s high-quality and compassionate care to more patients and families across the region.” Renovus, a Philadelphia-based private equity firm, focuses on lower middle-market investments and has a diverse portfolio that includes healthcare, technology, and professional services companies.

The proportion of Louisiana’s population that is over 60 is growing, according to the U.S. Administration for Community Living.  The U.S. Census Bureau estimates that nearly 25% of Louisianas population will be older than 60 by the year 2030. 

Louisiana has a history of developing leading home and hospice care providers, including LHC Group, which sold to UnitedHealth in 2023, and Amedysis, which has agreed to sell to UnitedHealth. The deadline to close that deal has recently been extended to December 31, 2025.