HERC pushes into emerging markets

Hertz Global Holdings has announced that it has completed the sale of the French and Spanish businesses of Hertz Equipment Rental Corporation (HERC) to the LOXAM Group through the transfer of the entire share capital of Hertz Equipement France SAS and Hertz Alquiler de Maquinaria, SLU.

The transaction includes 60 locations in France and two in Spain. LOXAM reported consolidated revenue of €812 million in 2014 and has over 4,500 employees and 623 locations across fourteen countries. The transaction increases its market share in the Paris area, the north and west of France as well as reinforces its Spanish network, which the company says will strengthen LOXAM’s positioning as a premier player in the European equipment rental industry.

HERC is a leading North American equipment rental company with operations in the Middle East and China along with a presence in eight other countries through franchise partnerships. The business remains on course with plans to separate from Hertz Global Holdings and become an independent company by mid-2016.

“This transaction will enable HERC to focus on core and specialty market expansion and investments that support our growth strategy, both in the short term and for our future as a standalone company,” said Larry Silber, president and chief executive officer, HERC. “We will continue to evaluate opportunities to increase our global footprint in emerging and growth markets, with an emphasis on franchises and joint ventures, as well as selective development of company-owned branches.”

Gerard Deprez, chairman of LOXAM, declared: “This transaction allows LOXAM to strengthen its nationwide leadership in France, where HERC is one of the leaders in construction equipment rental, and to reinforce its specialty activities. HERC Spain will bolster LOXAM’s current presence and allow LOXAM to grow in power equipment rental.”

HERC has also recently entered into a franchise agreement with the Khudairi Group for the exclusive license to provide rental equipment in Iraq using the “Hertz Equipment” brand and proprietary system. The company says the move will significantly add to HERC’s existing network in the Middle East, with HERC Iraq offering one of the largest light-to-medium equipment fleets in the country, serving oil and gas, construction, industrial, and government customers through a branch network that will include locations in Erbil, Baghdad, Basra, and Sulaimani.

“This agreement reflects our long-term global-business strategy to license franchises, establish joint ventures and, where appropriate, open company-owned branches in emerging and growth markets where the equipment-rental model is poised for continuing expansion,” Silber said. “We are especially pleased to partner with the Khudairi Group, which is one of Iraq’s most prominent commercial organizations and brings more than one hundred years of demonstrated success to the HERC Iraq franchise.”

“HERC Iraq is well positioned to support the country’s ongoing development, with oil-related and industrial projects, commercial construction and infrastructure work underpinning Iraq’s revitalization,” said Jay Early, international vice president, HERC. “The Khudairi Group’s experience working with firms engaged in engineering, procurement and construction, oilfield supply and service, and heavy machinery position HERC Iraq for immediate success. In addition, HERC Iraq’s access to a multitude of clients across all sectors throughout Iraq create a solid platform for long-term growth.”

“Our success in Saudi Arabia, our recent expansion into Qatar and our franchise in Iraq reflect our confidence in the ongoing development of key markets in the Middle East. With one of the largest and most diverse equipment line-ups in the industry, we are excited to play a role in the development of the region’s important public and private projects,” Early stated.

President of the Khudairi Group, Subhi Khudairi, said: “Our experience and expertise across the oilfield, construction, industrial and government sectors enables us to understand and meet customer requirements in these demanding markets. We are committed to providing best-in-class equipment backed with superior service and support with a highly trained and professional team across our locations.”

HERC Iraq will offer for rent a diverse range of earthmoving, power, aerial, material handling, electrical and compressed-air equipment, beginning January 2016.