OSHKOSH TRUCK BUYS EQUIPMENT MAKER FOR $3B
Published in: The Capital Times (Madison, WI)
Date: 10/16/2006
Military and commercial vehicle maker Oshkosh Truck Corp. said today it is buying JLG Industries Inc., a maker of aerial work platforms and booms, for about $3 billion in cash.
Oshkosh chairman, president and CEO Robert G. Bohn said the deal continues Oshkosh’s transformation into a global specialty vehicle maker.
“It is aligned with our historic acquisition strategy as we expand into complementary markets and it will be instrumental in building our global focus and scale that are increasingly needed to continue to be successful,” Bohn said of JLG.
The deal, which has been approved by the boards of both companies and still requires the approval from JLG shareholders and antitrust regulators, is expected to close in early December.
The company agreed to pay $28 per share for JLG, which represents a 35 percent premium over the stock’s Friday closing price of $20.75. According to the New York Stock Exchange, JLG has 106.7 million shares outstanding.
Oshkosh will also assume more than $200 million in JLG debt as part of the deal.
JLG shares climbed $6.85, or 33 percent, to $27.60 in morning trading on the New York Stock Exchange while Oshkosh shares sank $4.22, or 7.6 percent, to $51.32.
Oshkosh, which plans to finance the purchase with a $3.5 billion line of credit from Bank of America, expects the deal to add “modestly” to per-share earnings in fiscal 2007.
JLG, based in McConnellsburg, Pa., had $2.3 billion in revenues this fiscal year, with sales estimated to grow between 20 and 25 percent next year, Oshkosh said. The company is the top provider of aerial platforms in North America and Europe.
Oshkosh already has 9,400 employees and will be adding JLG’s 4,000, it said. JLG, which makes the Manlift and Toucan brands of aerial work platforms and Caterpillar-branded telehandlers, has manufacturing plants in the U.S., Belgium and France. Aerial work platforms lift workers so they can perform tasks at heights they could not otherwise reach while telehandlers are similar to cranes that lift building materials.
There will be no cuts to factory jobs, said Charles L. Szews, Oshkosh executive vice president and chief financial officer. Oshkosh also expects key officers of JLG to remain, he said.
Bohn said the company estimates annual growth between 3 percent and 6 percent through 2010, with JLG eventually making up 40 percent of sales and income. The integration of JLG should take between 18 and 24 months, Oshkosh said.
Bohn said he was excited about “the opportunity to grow this business on a global basis and to share the best practices between the two companies.”
JLG chairman, president and CEO William M. Lasky said the company expects an easy transition into Oshkosh. JLG was not for sale when Oshkosh approached them, he said.
“To be honest, I was hoping to find a reason why I didn’t think it would be a good fit for JLG. Unfortunately, that didn’t last very long when I looked at the success and track record of Oshkosh,” Lasky said.
Also this year, Oshkosh announced cash deals to buy AK Specialty Vehicles from medical device maker HealthTronics Inc. for $140 million and Iowa Mold Tooling Co., a maker of general mechanics, for $131 million.