Specialty vehicle manufacturer Oshkosh Truck Corp. last week announced it has signed a definitive agreement to acquire JLG Industries, global leader in aerial work platforms and telehandlers. In a deal that surprised rental industry participants as much as the majority of JLG officials, Oshkosh will acquire all outstanding shares of JLG for $28 per share. The total price, including transaction costs and assumed debt, is $3.2 billion in cash on a fully diluted basis.

While Oshkosh, based in Oshkosh, Wis., may not be well known to the rental industry, the company has been on an acquisition mode in recent years. One of the world’s largest builders of military trucks, the company has sought other acquisitions to diversify itself. Since 1996, more than half of the company’s revenue has come from companies it has acquired, a ratio that will increase dramatically with the JLG acquisition. It acquired Viking Truck & Equipment in 1999, Medtech Ambulance in 2000; Geesink Norba Group in 2001; Jerr-Dan Corp., a tractor-trailer manufacturer, in 2004; BAI Companies in 2004; London Machinery and Con-E-Co. in 2005; Iowa Mold Tooling and AK Specialty Vehicles in 2006.

The company’s track record is making acquisitions of successful companies, leaving existing management intact and not interfering with the business models of those companies. Company officials already stated they expected JLG management to remain intact.

“We have consistently executed strategies to grow this company, creating significant shareholder value during the last decade,” said Oshkosh’s chairman, president and CEO Robert Bohn. “The acquisition of JLG is the latest broad-based initiative in the continuing transformation of Oshkosh Truck Corp. 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 be successful. It also meets our major acquisition criteria, which include market leadership, strong management, double-digit growth opportunities and the expectation of earnings in excess of our cost of capital.”

Based in McConnellsburg, Pa., JLG had $2.3 billion in revenues during fiscal 2006 and has estimated a 20 to 25 percent increase in sales in fiscal 2007. JLG was ranked No. 22 on Fortune Magazine’s 2006 list of the 100 fastest-growing companies.

“This transition is a good fit for JLG,” said chairman, president and CEO Bill Lasky, who added that he had not been looking to sell the company before the offer from Oshkosh was presented. “Oshkosh has a similar philosophy of offering premier products, creating strong market positions and delivering after-sales service and support. For the JLG team, this combination offers additional growth opportunities.”

Oshkosh officials said the company was attracted by JLG’s 20-year agreement to produce Caterpillar-branded telehandlers. The acquisition also gives the combined companies enhanced buying power, buying more than $4 billion worth of raw materials, parts and supplies per year.

The transaction has been approved by the boards of both companies but still requires approval from JLG shareholders and customary anti-trust regulators. The deal is expected to close within 90 days.

Oshkosh agreed to pay $28 per share, a 35-percent premium from the stock’s closing price of $20.75 on Friday October 13, the last trading day before the deal was announced. Oshkosh is also assuming more than $200 million in debt. Oshkosh will finance the transaction with a $3.5 billion senior credit facility provided by Bank of America and JLMorgan Chase Bank.

Upon completion of the transaction, JLG will become the largest of four Oshkosh business segments. Oshkosh estimates that JLG will represent about 40 percent of its consolidated sales and operating income in fiscal 2008, the first full fiscal year of Oshkosh’s expected ownership, topping its defense segment.