H&E Equipment Services last week announced a definitive agreement to acquire J.W. Burress, a privately owned construction equipment distributor serving the mid-Atlantic markets out of 12 locations, with headquarters in Roanoke, Va. The acquisition is subject to the completion of Burress’ 2006 audit, obtaining third-party consents from certain equipment manufacturers and vendors, receipt of financing, closing of the acquisition no later than July 31, and other customary closing conditions.
The sale of new and used equipment accounts for about 60 percent of the company’s revenues. Burress represents, among others, Diamond Z, Doosan, Hitachi, Manitowoc, Grove and Terex. H&E said it does not anticipate continuing to represent Hitachi, and therefore the acquisition is not conditioned on continuing the Hitachi distributorship. However, H&E believes it will be able to expand and grow its relationship with other manufacturers that currently do business with Burress as well as other manufacturers that have had discussions with it.
The estimated purchase price without Hitachi representation would be about $108.7 million, subject to adjustments, plus about $4 million in assumed debt. An additional $12.9 would be added to the transaction if Burress continues to represent Hitachi. Burress had unaudited revenues of about $178 million in 2006, with the sale, rental and service of Hitachi products accounting for about 28 percent. The company expects the deal to be accretive to 2007 results.
“Burress is one of the premier distributors of heavy construction equipment in the U.S., and has an outstanding reputation with the manufacturers they represent and the end users they serve,” said John Engquist, president and CEO of H&E. “This acquisition will expand our footprint contiguously throughout the mid-Atlantic region and affords us significant growth opportunities. Our ideal acquisition target is a distributor with strong retail sales and product support capabilities and a rental component that we can improve and grow significantly. Burress certainly fits this profile.”
Last week H&E announced solid first quarter profits, with a 15.1-percent total revenue increase and a 17-percent rental volume increase. Based in Baton Rouge, La., H&E Equipment Services is No. 9 on the new RER 100. The company rents, sells and provides parts and service support for four core categories of equipment: aerial work platforms, cranes, earthmoving equipment and industrial forklifts.