ESTERO, Fla., June 6, 2016 /PRNewswire/ -- The board of
directors of Hertz Global Holdings, Inc. (NYSE: HTZ) has
formally approved the previously announced separation of its car
rental and equipment rental businesses. The separation is
expected to be tax-free to Hertz Global Holdings stockholders for
U.S. federal income tax purposes. A Form 10 registration
statement detailing the transaction is on file with the U.S.
Securities and Exchange Commission.
Emerging from the transaction will be two companies: a new Hertz
Global Holdings, Inc., which will consist of the worldwide rental
car business and leasing business of Donlen Corporation, and Herc
Holdings Inc., which will consist of the worldwide equipment rental
business.
"The creation of these two public companies enables each to
focus on their respective core businesses, thereby increasing the
opportunity for both to create optimal shareholder value," said
John Tague, president and chief
executive officer of Hertz Global Holdings, who will continue in
the same role at the new Hertz Global Holdings following the
transaction.
"This separation marks the culmination of considerable work by
our leadership team over the past 12 months. While developing
and implementing a multi-year margin improvement plan for our
rental car business, we installed a strong, experienced management
team at Herc and worked with them to strengthen the fundamentals of
its equipment rental business. We recently completed the
selection of an experienced board of directors and facilitated
creation of a capital structure with the requisite financing to
support the business. Both businesses are now well-positioned
to realize their full potential."
Transaction details
The transaction will be completed through a dividend
distribution of all of the capital stock of a new entity, Hertz
Rental Car Holding Company, Inc., which will consist of the
worldwide rental car business and the fleet leasing business of
Donlen Corporation. The dividend will be paid to existing Hertz
Global Holdings' shareholders of record as of June 22, 2016, and, subject to the satisfaction
of applicable conditions, is expected to be completed on
June 30, 2016.
Stockholders of record as of the close of business on the record
date of June 22, 2016, will receive
shares in Hertz Rental Car Holding Company, Inc. on the
June 30, 2016, distribution date at a
rate of one share for every five shares currently held. Each
current share of Hertz Global Holdings will represent one share of
Herc Holdings, but those shares will be adjusted for a 1-for-15
reverse stock split that will be implemented immediately after the
separation.
Upon closing, Hertz Rental Car Holding Company will change its
name to Hertz Global Holdings and will continue to manage the
company's rental car business. Also upon closing, the current
Hertz Global Holdings entity will change its name to Herc Holdings
Inc. and operate the equipment rental business.
On July 1, 2016, the new Hertz
Global Holdings will begin regular-way trading on the New York
Stock Exchange (NYSE) under the existing HTZ symbol, while Herc
Holdings will begin regular-way trading on the NYSE under the
symbol HRI.
The company expects "when issued" trading for the new Hertz
Global Holdings and Herc Holdings to begin June 20, 2016, two days prior to the record date
for the separation transaction.
Herc Holdings
In a separate announcement, expected members of the Board of
Directors for Herc Holdings were named. That board will be
led by non-executive chairman Herbert
Henkel. Larry Silber,
president and chief executive officer of the equipment rental
subsidiary for the current Hertz Global Holdings, will be president
and chief executive officer for Herc Holdings.
"As a leader in the equipment rental industry, our separation as
an independent company enables us to focus on opportunities to
expand our business and enhance profitability," Silber said.
"We are already making good progress and continue to execute a
solid business plan and strategy designed to enhance customer
service, expand and diversify our revenues and improve operating
efficiencies to generate value for our shareholders."
About Herc Holdings
Founded in 1965, Herc Holdings Inc., which will operate through
its Herc Rentals Inc. subsidiary following the separation, is one
of the leading equipment rental suppliers in North America with approximately 280
company-operated branches, of which approximately 270 are in
the United States and Canada. Herc Holdings is a full-line
equipment-rental supplier in key markets, including commercial and
residential construction, industrial and manufacturing, refineries
and petrochemicals, civil infrastructure, automotive, government
and municipalities, energy, remediation, emergency response,
facilities, entertainment and agriculture. The equipment
rental business is supported by ProSolutions™,
our industry-specific solutions-based services, and our
ProContractor Tools™ line, both aimed at helping
customers work more efficiently, effectively and safely. Herc
Holdings' 2015 total revenues as reported in the recently filed
Information Statement, were nearly $1.7
billion. After the spin-off, the company will have
approximately 4,600 employees. For more information on Herc
Holdings and its products and services, visit:
www.hertzequip.com.
About Hertz Global
Hertz Global Holdings operates the Hertz, Dollar, Thrifty and
Firefly car rental brands in approximately 9,980 corporate and
licensee locations throughout approximately 150 countries in
North America, Europe, Latin
America, Asia, Australia, Africa, the Middle
East and New Zealand. Hertz
Global Holdings is the largest worldwide airport general use car
rental company with approximately 1,635 airport locations in the
U.S. and more than 1,320 airport locations internationally. Product
and service initiatives such as Hertz Gold Plus Rewards,
NeverLost®, Carfirmations, Mobile Wi-Fi and unique vehicles offered
through the Adrenaline, Dream, Green and Prestige Collections set
Hertz Global Holdings apart from the competition. Additionally,
Hertz Global Holdings owns the vehicle leasing and fleet management
leader Donlen Corporation, operates the Hertz 24/7 hourly car
rental business in international markets and sells vehicles through
its Rent2Buy program. The company also owns Hertz Equipment Rental
Corporation, one of the largest equipment rental businesses with
more than 280 locations worldwide offering a diverse line of
equipment and tools for rent and sale. HERC primarily serves the
construction, industrial, oil, gas, entertainment and government
sectors. For more information about Hertz Global Holdings, visit:
www.hertz.com.
Cautionary Note Concerning Forward-Looking Statements
Certain statements contained in this release include
"forward-looking statements." These statements often include words
such as "believe," "expect," "project," "potential," "anticipate,"
"intend," "plan," "estimate," "seek," "will," "may," "would,"
"should," "could," "forecasts" or similar expressions. These
statements are based on certain assumptions that Hertz Global
Holdings has made in light of its experience in the industry as
well as its perceptions of historical trends, current conditions,
expected future developments and other factors it believes are
appropriate in these circumstances. Hertz Global Holdings believes
these judgments are reasonable, but you should understand that
these statements are not guarantees of performance or results, and
actual results could differ materially from those expressed in the
forward-looking statements due to a variety of important factors,
both positive and negative, that may be revised or supplemented in
subsequent reports on Forms 10-K, 10-Q and 8-K.
Among other items, such factors could include: the effect of our
proposed separation of our equipment rental business and ability to
obtain the expected benefits of any related transaction; our
ability to complete the proposed separation within the expected
timeframe; changes to our senior management team; our ability to
remediate the material weaknesses in our internal controls over
financial reporting; levels of travel demand, particularly with
respect to airline passenger traffic in the United States and in global markets;
significant changes in the competitive environment, including as a
result of industry consolidation, and the effect of competition in
our markets on rental volume and pricing, including on our pricing
policies or use of incentives; an increase in our fleet costs as a
result of an increase in the cost of new vehicles and/or a decrease
in the price at which we dispose of used vehicles either in the
used vehicle market or under repurchase or guaranteed depreciation
programs; occurrences that disrupt rental activity during our peak
periods; our ability to achieve and maintain cost savings and
efficiencies and realize opportunities to increase productivity and
profitability; our ability to accurately estimate future levels of
rental activity and adjust the size and mix of our fleet
accordingly; our ability to maintain sufficient liquidity and the
availability to us of additional or continued sources of financing
for our revenue earning equipment and to refinance our existing
indebtedness; our ability to realize the operational efficiencies
of the acquisition of Dollar Thrifty Automotive Group, Inc.; our
ability to maintain access to third-party distribution channels,
including current or favorable prices, commission structures and
transaction volumes; an increase in our fleet costs or disruption
to our rental activity, particularly during our peak periods, due
to safety recalls by the manufacturers of our vehicles and
equipment; a major disruption in our communication or centralized
information networks; financial instability of the manufacturers of
our vehicles and equipment, which could impact their ability to
perform under agreements with us and/or their willingness or
ability to make cars available to us or the rental car industry on
commercially reasonable terms; any impact on us from the actions of
our franchisees, dealers and independent contractors; our ability
to maintain profitability during adverse economic cycles and
unfavorable external events (including war, terrorist acts, natural
disasters and epidemic disease); shortages of fuel and increases or
volatility in fuel costs; our ability to successfully integrate
acquisitions and complete dispositions; our ability to maintain
favorable brand recognition; costs and risks associated with
litigation and investigations; risks related to our indebtedness,
including our substantial amount of debt, our ability to incur
substantially more debt and increases in interest rates or in our
borrowing margins; our ability to meet the financial and other
covenants contained in our Senior Credit Facilities, our
outstanding unsecured Senior Notes and certain asset-backed and
asset-based arrangements; our ability to successfully outsource a
significant portion of our information technology services or other
activities; changes in accounting principles, or their application
or interpretation, and our ability to make accurate estimates and
the assumptions underlying the estimates, which could have an
effect on earnings; changes in the existing, or the adoption of new
laws, regulations, policies or other activities of governments,
agencies and similar organizations where such actions may affect
our operations, the cost thereof or applicable tax rates; the
effect of tangible and intangible asset impairment charges; our
exposure to uninsured claims in excess of historical levels;
fluctuations in interest rates and commodity prices; and our
exposure to fluctuations in foreign exchange rates.
Additional information concerning these and other factors can be
found in our filings with the Securities and Exchange Commission,
including our most recent Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K.
You should not place undue reliance on forward-looking
statements. All forward-looking statements attributable to Hertz
Global Holdings or persons acting on its behalf are expressly
qualified in their entirety by the foregoing cautionary statements.
All such statements speak only as of the date made, and Hertz
Global Holdings undertakes no obligation to update or revise
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.
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SOURCE Hertz Global Holdings, Inc.