United Rentals to acquire H&E Equipment Services in deal valued at $4.8 billion

United Rentals said on Tuesday it would acquire smaller rival H&E Equipment Services in a deal valued at $4.8 billion, as the company looks to tap into demand for equipment rentals.

Industrial equipment demand has remained strong from commercial construction firms, on the back of higher government spending on infrastructure and production delays at manufacturers.

Founded in 1961, H&E provides general rental fleet including aerial work platforms, earthmoving equipment, material handling equipment and other general and specialty lines of equipment.

Shareholders of H&E will receive $92 per share in cash, United said, representing a 109.4% premium to the stock's last close on Monday.

"This purchase of H&E supports our strategy to deploy capital to grow the core business," United Rentals CEO Matthew Flannery said.

The combination will expand United's rental fleet by almost 64,000 units, the companies said.

United Rentals, one of the largest equipment rental firms in the world, has reported a consistent rise in its annual revenue over the past four years.

Shares of H&E Equipment were up nearly 106% in premarket trading, United rose 3%.