The long-planned separation of Hertz Equipment Rental Corp. (HERC) from its parent firm, Hertz Global Holdings, is set to happen by the end of 2016’s second quarter, according to recent SEC filings.
“We’ve taken a number of actions this year to drive performance, and preparing the equipment rental business to operate as a stand-alone company is among the most significant,” said Hertz Global Holdings CEO John Tague.
Hertz also has highlighted the new leadership team for the rental business it has assembled over the past year. The company has tapped Larry Silber, formerly of Ingersoll Rand’s utility equipment group, as president and CEO.
“We are confident that our separation from Hertz Global Holdings will provide us with better flexibility and focus to pursue growth opportunities within our core equipment rental business,” Silber said in a press statement. “[It] will enable us to provide better value to our customers, employees and suppliers.”
HERC has seen a 14% year-over-year revenue increase in non-oil-and-gas markets in the third quarter of 2015. The spin-off would help HERC to benefit from a separate capital structure and its own branding. “All of our larger competitors have been able to operate within their own business model,” said Lisa Farrar, HERC senior director of marketing, in an interview with ENR last year. “So, for us to be able to have a focused equipment rental model, tomorrow’s a new day.”
HERC has been in business for more than 50 years and is the oldest rental firm of its type serving construction and industrial clients. It has about 4,500 employees and 280 company-owned branches, 270 of which are in North America.
Hertz’s spin-off of HERC was delayed by an SEC investigation and an internal audit of Hertz’s 2011-13 earnings. An internal audit by the company, concluded in July 2015, found $207 million in pretax misstatements from 2011 to 2013.