Oshkosh Truck Corp. announced it has signed a definitive agreement to acquire JLG Industries Inc., the global leader in aerial work platforms and telehandler vehicles. Oshkosh will acquire all outstanding shares of JLG for $28 per share. Total consideration, including transaction costs and assumed debt, is $3.2 billion in cash on a fully diluted basis. This transaction will create a $6 billion global specialty vehicle manufacturer.
"We have consistently executed strategies to grow this company, creating significant shareholder value during the last decade," said Robert G. Bohn, Oshkosh's chairman, president and chief executive officer. "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 continue 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."
JLG had $2.3 billion in revenues during fiscal 2006 and has estimated a 20%-25% increase in sales in fiscal 2007. It has the top market position in North America and Europe for aerial work platforms and is the top producer of telehandlers in the U.S. JLG placed 22nd on FORTUNE magazine's 2006 list of the 100 Fastest-Growing Companies. The ranking was based on three-year profit and sales growth through the first quarter of 2006 and three-year total return to shareholders.
"This transaction is a good fit for JLG," said William M. Lasky, chairman, president and chief executive officer of JLG. "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. For our customers, JLG will become an even stronger partner in their future success. We look forward to working with the Oshkosh management team to ensure a rapid and seamless transition."
"We are excited about the addition of this market-leading, global company and expect a smooth integration into the Oshkosh family," said Bohn. "At the same time, we expect to realize substantial purchasing and logistical synergies, while benefiting from JLG's already outstanding manufacturing operations. We have a long history of successful acquisitions and expect to build on that history."
The transaction is expected to be modestly accretive to Oshkosh's earnings per share in fiscal 2007 after giving effect to estimated non-cash charges relating to amortization of acquired intangibles and other one-time accounting and transaction-related costs. Oshkosh will finance the transaction with a $3.5 billion senior credit facility provided by Bank of America, N.A., and JPMorgan Chase Bank, N.A., and retire most of JLG's currently outstanding debt. The acquisition has been approved by the board of directors of each company and is subject to customary closing conditions, including approval under Hart-Scott-Rodino and similar laws outside the U.S. and the approval by the shareholders of JLG. The transaction is expected to be complete within 90 days.
Upon completion of the transaction, JLG will become the largest of four business segments of Oshkosh. In fiscal 2008, the first full fiscal year of Oshkosh's expected ownership of JLG, Oshkosh estimates that JLG will represent approximately 40% of its consolidated sales and operating income.
"We are pleased to be bringing a solid company like JLG into Oshkosh Truck," Bohn added. "Their product leadership and innovative culture will be a great fit with our approach. It is evident from the strong reactions of both boards that we have an opportunity to do something very special."