After being outbid for Neff Corp., Baton Rouge-based H&E Equipment Services Inc. said Wednesday it will not increase its $510 million offer for the Miami-based rental firm.

The announcement leaves Neff free to terminate the previously announced merger agreement with H&E. The agreement with H&E requires Neff to pay $13.2 million to H&E if Neff backs out to accept another offer.

"We will remain disciplined on the price that we pay for assets," H&E Chief Executive Officer John Engquist said.

He said the company will pursue a strategy of expanding into new markets on its own and opportunistic acquisitions of smaller companies — in "a higher and better use for our resources."

H&E's offer, announced in mid-July, included taking on $690 million of Neff's debt. The acquisition would have boosted the number of H&E branches from 78 to 147 and created a combined equipment fleet of 43,749 units with a total original equipment cost of $2.2 billion.

Unfortunately for H&E, the deal allowed Neff to seek other bids until Aug. 20. On Monday, Neff said it had gotten an offer that was roughly $90 million higher than H&E's.

Immediately after H&E announced the planned acquisition in mid-July, KeyBanc Capital Markets Equity Research Analyst Joe Box issued a note saying his first impression was positive. He cited the favorable price, the benefits of building out metro markets and the fact that the deal could add 30 cents to 86 cents to H&E's 2018 earnings per share.

However, he added that his initial optimism was somewhat tempered by the inclusion of a "go shop" period that allowed Neff to entertain other offers. The termination fee was also low enough that it offered little in the way of a barrier to Neff breaking its agreement with H&E.

The acquisition would have offered a number of advantages for H&E and radically accelerated the company's growth. The advantages included:

• Adding Neff's fleet complementing H&E’s concentration in aerial work platform equipment, or devices that provide access to elevated sites for people and/or equipment. The combined company would have had one of the largest earth-moving rental fleets in the industry: 8,736 units with an original equipment cost of $727 million.

Just a month ago, Engquist said the earth-moving fleet would allow H&E to take advantage of "any future governmental infrastructure spending initiatives." He described the earth-moving segment as "under-penetrated" and an opportunity for growth.

• Strengthening H&E’s existing footprint in the Gulf Coast, mid-Atlantic, Southeast and West Coast regions.

• Reducing costs, such as overhead and equipment, $25 million to $30 million a year.

Follow Ted Griggs on Twitter, @tedgriggsbr.