Astec Industries has reached an agreement to sell its American Augers Inc. subsidiary and certain assets related to the Trencor large trencher product line of Astec Underground to The Charles Machine Works, manufacturer of Ditch Witch products, for about $55 million in cash, subject to closing adjustments. The companies expect the transaction to close before the end of 2012.
Not included in the sale are the American Augers vertical oil and gas drilling rig product line and the four-track surface miner product line manufactured at Astec Underground. The total revenues of the sold business unit and product line were $42 million for the nine months ended Sept. 30.
"We acquired the Trencor operation in 1988 and American Augers in 1999,â€ť Dr. J. Don Brock, Astec chairman and CEO said. â€śThese businesses have been very cyclical through the years. Our strategy has been to buy and grow companies; however, we sold our utility trencher and drill line to Toro earlier this year, and the opportunity became available to sell American Augers and the Trencor line of large trenchers at Astec Underground. We will continue to manufacture the vertical oil drilling rigs and related equipment by moving that product line to GEFCO. At Astec Underground in Loudon, Tennessee, we plan to continue to grow our pump trailer business and develop more equipment related to the fracking industry, as well as expand our surface miner product line. These products are a part of our strategy to grow in the energy and mining industries."