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Hertz hives off HERC equipment rental company

19 Mar 14 Hertz is to separate its equipment and car rental businesses into two independent, publicly traded companies.

Hertz will receive net cash proceeds from a Hertz Equipment Rental Corporation (HERC) spin-off of approximately US$2.5bn (£1.5bn), which will be used to pay down Hertz debt and support a newly approved $1 billion share repurchase programme.

The company said that, following the separation, HERC will remain one of the largest and most diversified equipment rental businesses in the world; it has approximately 335 branches in the United States, Canada, France, Spain, China and Saudi Arabia, as well as through international franchisees. HERC rents a broad range of equipment, including aerial man-lifts, air compressors and tools, earthmoving equipment and power generators, forklifts and material handling, pumps, and trucks and trailers. It also derives revenues from the sale of new and used equipment and consumables as well as through its Hertz Entertainment Services division, which rents lighting and related aerial products used primarily in the US entertainment industry.

HERC had annual revenues of over US$1.5bn in 2013, with 38% of its 2013 revenues derived from the construction market.

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