Oshkosh Truck Corp., a leading manufacturer of specialty vehicles and vehicle bodies, last week announced that it completed the acquisition of JLG Industries for $28 per share in an all-cash transaction valued at approximately $3.2 billion. With the addition of JLG’s forecasted revenues, Oshkosh Truck now expects to surpass $6 billion in net sales for fiscal 2007.
McConnellsburg, Pa.-based JLG Industries announced early last week that its shareholders approved the agreement and plan of merger of JLG, Oshkosh Truck Corp. and Steel Acquisition Corp., a wholly owned subsidiary of Oshkosh, which cleared the way for completion of the agreement.
“I am pleased to welcome JLG, the world leader in aerial work platforms and telehandlers, to the Oshkosh family of companies,” said Robert Bohn, Oshkosh’s chairman, president and CEO. “This acquisition further strengthens our company by diversifying our product offerings and customer segments, providing scale in procurement and broadening our global reach, which are all important to our growth plans. JLG is also the 15th acquisition we’ve made under the current management team in the last 10 years. It will operate as our fourth and largest segment. JLG follows our formula for acquisition success, which includes strong management, double-digit growth opportunities and the expectation of returns in excess of our cost of capital.”
The company also affirmed its previous estimates that the Oshkosh stand-alone earnings per share, without giving effect to the JLG acquisition, are expected to be $3.05 to $3.15 and that the JLG acquisition will be modestly accretive to its stand-alone EPS for the fiscal year ended Sept. 30, 2007. Due to the timing of the JLG acquisition closing during the seasonally slow holiday period and the estimated impact of certain non-cash purchase accounting adjustments, the company estimates that the JLG acquisition will be approximately 15 cents dilutive to EPS for the first quarter of fiscal 2007. Accordingly, the company now estimates that EPS for its first quarter of fiscal 2007, including the impact of the JLG acquisition, will be approximately 35 to 40 cents per share. The company said it expects to provide its sales and EPS estimates for fiscal 2007, including the impact of the JLG acquisition, during the first week of February 2007, when it reports its first-quarter 2007 earnings.
Due to the significant nature of the JLG acquisition to Oshkosh, Robert Bohn appointed Charles Szews, executive vice president and chief financial officer, to serve as interim president of JLG and lead the integration process. Szews will also continue to act in his current capacity as executive vice president and chief financial officer of Oshkosh Truck.
The company expects that several key executives will continue with JLG including: Craig Paylor, senior vice president of sales and marketing, who has been with JLG for more than 20 years in a variety of leadership and executive roles; Peter Bonafede, senior vice president of manufacturing and supply chain management, who has been with JLG for more than seven years in various operations and supply chain management positions; and
Wayne MacDonald, senior vice president of engineering, who has been with JLG for more than 30 years in many different engineering and technology development roles.
Former JLG chairman, CEO and president Bill Lasky; executive vice president and chief financial officer Jim Woodward; and senior vice president and general counsel Tom Singer are no longer with the company.
“The integration of JLG is a top priority of the corporation and our appointment of Charlie Szews as JLG’s interim president reflects that importance,” said Bohn. “Furthermore, we are excited to have a large group of key JLG executives remain with us to continue running the business while we collectively work together to realize cost synergies and operational improvements in a global market.”
“Oshkosh expects to integrate JLG by applying its successful method of cross-functional collaboration,” said Szews. “We have eight operational teams, with members from both Oshkosh and JLG, leading the integration initiative and focused on specific near- and long-term objectives. Planning is well underway and we are pleased with initial progress. In addition, the company is enlisting external consulting resources in select areas to spur velocity and provide expertise in effective integration. The similar cultures and shared values of our organizations are integral to this process, and we expect they will enhance productivity throughout the integration process.”
Oshkosh, Wis.-based Oshkosh Truck Corp. is a designer, manufacturer and marketer of a broad range of specialty access equipment; commercial, fire and emergency and military vehicles; and vehicle bodies. Oshkosh’s products are used worldwide by rental companies, fire and emergency units, defense forces, municipal and airport support services, and concrete placement and refuse businesses.