CHARLOTTE, Mich., Dec. 13, 2016 /PRNewswire/ -- Spartan
Motors, Inc. (NASDAQ: SPAR) ("Spartan" or the "Company"), a global
leader in specialty chassis and vehicle design, manufacturing, and
assembly, today announced its wholly-owned subsidiary, Spartan
Motors USA, Inc., has entered into
a definitive agreement to acquire Smeal Fire Apparatus Co.
("Smeal"), an industry-leading innovator and manufacturer of fire
apparatus in North America, and
its subsidiaries for $36.3 million,
subject to certain net working capital adjustments, the Company's
forgiveness of certain liabilities owed by Smeal to the Company,
and a subsequent tax gross-up payment, which is expected to be more
than offset by tax benefits accruing to the Company. The
acquisition will enable Spartan Motors to strengthen its Emergency
Response business, gain scale and geographic reach in the industry,
and accelerate its Emergency Response business unit turnaround
plan. The transaction is expected to close in January 2017, subject to customary closing
conditions.
Smeal is expected to generate 2016 revenues of approximately
$100 million, which includes
approximately $30 million of Spartan
chassis sold to Smeal. The newly combined Spartan Emergency
Response business unit will rank as one of the top-four North
American fire apparatus manufacturers and will be well positioned,
in an increasingly consolidating industry, to provide a robust and
respected portfolio of leading products, services, and
technologies. Today, Spartan's Emergency Response business unit
engineers and builds fire truck cabs and chassis for many of the
industry's leading original equipment manufacturers (OEMs),
including Smeal, as well as designs and manufactures complete fire
apparatus. The acquisition of Smeal is a logical next step in the
longstanding relationship between the two companies, which spans
more than 30 years.
"We look forward to adding Smeal's industry-leading product
portfolio and manufacturing expertise to Spartan's, while expanding
on a decades-long successful partnership," said Daryl Adams, President and Chief Executive
Officer of Spartan Motors. "We expect the acquisition to be
accretive to earnings in 2017 and bring significant scale to our
Emergency Response vehicle portfolio, which will help accelerate
the turnaround of the Spartan Emergency Response business unit. It
also expands the geographic reach of our dealers, benefits all of
our customers by expanding our product offerings, and brings an
additional portfolio of leading technology and expertise to the
market."
Adams continued, "We are pleased that Smeal chose Spartan Motors
as their partner to carry on their brand's legacy, as we take our
supplier relationship to the next level. Spartan Motors is prepared
to lead the consolidation charge in the fire apparatus market as
strategic opportunities present themselves, and this acquisition
represents a deliberate and strategic decision to accelerate the
turnaround of Spartan's Emergency Response business unit.
Importantly, we also preserve a large, longstanding chassis
customer relationship and protect the interests of their dealer
channel, as we expand our dealer network across the U.S. and
Canada and simultaneously
accelerate our goal of becoming the leader in the fire apparatus
market."
Founded in 1955, Snyder,
Neb.-based Smeal and its subsidiaries, U.S. Tanker Co. and
Ladder Tower Co., are leaders and innovators in fire truck
manufacturing and vehicle technology, offering a full line of
aerial ladders and platforms (including Squrt®, TeleSqurt®, and
Snorkel®), tractor-drawn aerials (TDAs), pumpers, stainless steel
tankers and wildland urban interface vehicles (WUI). Today,
Smeal operates facilities located in Snyder and Neligh,
Neb.; Delavan, Wis.; and
Ephrata, Pa.
"Spartan Motors is the perfect fit for Smeal, our customers, our
employees, and our operational leadership team, as we combine with
a proven ally and industry leader to help solidify our future and
preserve the legacy of the Smeal organization," said Rod Cerny, Smeal's Chairman of the Board. "As
part of a larger, profitable and well-capitalized public company,
we will have the working capital necessary to ensure continued
investment in product development and make sure the Smeal brand is
able to deliver the exceptional products and service our dealers,
departments, and municipality customers have come to expect."
Acquisition Highlights:
- The acquisition is a positive and compelling strategic fit for
both companies and is an important step in securing the Company's
market leadership in an increasingly consolidating industry
- The acquisition is expected to be accretive to earnings for
Spartan Motors in 2017 through a combination of operating
efficiency efforts and synergies
- Smeal's (including U.S. Tanker Co. and Ladder Tower Co.)
notably superior aerial ladder, platform, and TDA product portfolio
enhances and complements Spartan's and brings industry-leading
product technology to an important, high-performance product
subset
- The combined Company will have 47 dealers in 44 states, 10
provinces and 3 territories, giving Spartan Emergency Response the
ability to serve customers in the entire U.S. and all of
Canada
- Smeal is expected to add approximately $70 million in annual revenue (excludes
$30 million of Spartan chassis sold
to Smeal) to the Company's Emergency Response segment, and
positions Spartan Emergency Response as one of the top-four fire
apparatus manufacturers in the U.S. and Canada
- Smeal is expected to generate positive EBITDA in 2016
- The transaction will be initially financed with Spartan Motors'
recently amended $100 million line of
credit
"We are proud of this significant milestone for Spartan's
Emergency Response business, and welcome Smeal's knowledgeable and
respected operational management team and employees to the Spartan
Motors family," concluded Daryl
Adams. "This transaction will bring together some of the
best talent in the industry and provides an opportunity for all
employees to pursue a broader and more diverse career path."
For more information regarding this transaction, please visit
www.spartanmotors.com/smeal.
Conference Call and Webcast Information
The Company will also host a conference call and webcast on
Wednesday, December 14, 2016, at
9:00 a.m. ET to discuss the
acquisition with analysts and institutional investors. Daryl Adams, Chief Executive Officer, and
Rick Sohm, Chief Financial Officer,
will participate on the call.
The conference call and webcast will be available via:
Webcast:
|
www.spartanmotors.com
(Click on "Investor Relations" then "Webcasts &
Transcripts")
|
Conference
Call:
|
1-844-868-8845
(domestic) or 412-317-6591 (international); passcode:
10097929
|
If you are unable to participate during the live webcast, the
call will be archived at http://www.spartanmotors.com (Click
on "Investor Relations" then "Webcasts & Transcripts").
About Spartan Motors
Spartan Motors, Inc. is a leading designer, engineer,
manufacturer and marketer of a broad range of specialty vehicles,
specialty chassis, vehicle bodies and parts for the fleet and
delivery, recreational vehicle (RV), emergency response, defense
forces and contract assembly (light/medium duty truck) markets. The
Company's brand names— Spartan Motors, Spartan Specialty Vehicles,
Spartan Emergency Response, Spartan Parts and Accessories, and
Utilimaster®, a Spartan Motors Company— are known for quality,
durability, performance, customer service and first-to-market
innovation. The Company employs approximately 1,800 associates, and
operates facilities in Michigan,
Indiana, Pennsylvania, Kansas, South
Dakota, Saltillo, Mexico;
and Lima, Peru. Spartan reported
sales of $550 million in 2015. Visit
Spartan Motors at www.spartanmotors.com.
About Smeal
Smeal, including U.S. Tanker Co. and Ladder Tower Co., is
recognized as a premier manufacturer, inventor and innovator of
customized fire apparatus. The company offers a full line of custom
and commercial pumpers, stainless steel tanker, aerial ladders,
platforms, TDA's and wildland urban interface vehicles (WUI). Smeal
is committed to leading the industry in high quality fire
apparatus, delivery times and customer experience. Smeal sells its
products worldwide and is based in Snyder, Neb. To learn more, visit smeal.com
and ustanker.com.
This release contains several forward-looking statements that
are not historical facts, including statements concerning our
business, strategic position, financial projections, financial
strength, future plans, objectives, and the performance of our
products and operations. These statements can be identified
by words such as "believe," "expect," "intend," "potential,"
"future," "may," "will," "should," and similar expressions
regarding future expectations. These forward-looking
statements involve various known and unknown risks, uncertainties,
and assumptions that are difficult to predict with regard to
timing, extent, and likelihood. Therefore, actual performance
and results may materially differ from what may be expressed or
forecasted in such forward-looking statements. Factors that could
contribute to these differences include operational and other
complications that may arise affecting the implementation of our
plans and business objectives; continued pressures caused by
economic conditions and the pace and extent of the economic
recovery; challenges that may arise in connection with the
integration of new businesses or assets we acquire or the
disposition of assets; restructuring of our operations, and/or our
expansion into new geographic markets; issues unique to government
contracting, such as competitive bidding processes, qualification
requirements, and delays or changes in funding; disruptions within
our dealer network; changes in our relationships with major
customers, suppliers, or other business partners, including Isuzu;
changes in the demand or supply of products within our markets or
raw materials needed to manufacture those products; and changes in
laws and regulations affecting our business. Other factors
that could affect outcomes are set forth in our Annual Report on
Form 10-K and other filings we make with the Securities and
Exchange Commission (SEC), which are available at
www.sec.gov or our website. All forward-looking
statements in this release are qualified by this paragraph.
Investors should not place undue reliance on forward-looking
statements as a prediction of actual results. We undertake no
obligation to publicly update or revise any forward-looking
statements in this release, whether as a result of new information,
future events, or otherwise.
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SOURCE Spartan Motors, Inc.