Jlg (NYSE:JLG)
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Oshkosh Truck Corporation (NYSE: OSK):
$3.2 Billion, All-Cash Transaction Creates Global Specialty Vehicle
Manufacturer with $6 Billion in Revenue
JLG, Market Leader in Aerial Work Platforms and Telehandlers, to
Become Oshkosh Truck’s Fourth Segment
Expected to be Accretive in First Year and to Generate Significant
Pre-Tax Synergies
Oshkosh Truck Corporation (NYSE: OSK) today announced it has signed a
definitive agreement to acquire JLG Industries, Inc. (NYSE: JLG), 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 Corporation. 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 to 25 percent 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 United States. 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,”
stated 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. 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,”
Bohn added.
Details of the Transaction
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 completed within ninety days.
Upon completion of the transaction, JLG will become the largest of four
business segments of Oshkosh. It continues the diversification of the
company. In fiscal 2008, the first full fiscal year of Oshkosh’s
expected ownership of JLG, Oshkosh estimates that JLG will represent
approximately 40 percent of its consolidated sales and operating income.
“We are pleased to be bringing a solid
company like JLG into Oshkosh Truck. 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,” added Bohn.
JLG: A Market Leader in Aerial Access
Equipment
JLG is the leading manufacturer of access equipment including aerial
work platforms and telehandlers. The company primarily serves the
construction market, with customers such as equipment rental companies,
construction contractors and other manufacturing or industrial
companies. The JLG portfolio of leading brands - JLG®,
SkyTrak®, Gradall®
and Lull® - is renowned for its premium
quality, low total cost of ownership and advanced technologies. The
company also provides aftermarket support, including parts, service and
reconditioning.
JLG is the worldwide leader in aerial work platforms, including boom
lifts, scissor lifts and vertical mast lifts. These are marketed under
the JLG® brand and accounted for
approximately half of JLG’s fiscal 2006
sales. JLG is also the North American leader, offering multiple brands,
in the sale of a broad line of telehandlers, including all-wheel-steer,
rear-pivot, traversing boom and horizontal-loading designs for
commercial and military applications.
During the past several years, JLG completed a major realignment of its
manufacturing facilities in the United States, Belgium and France.
Consequently, Oshkosh has no plans at this time to make any significant
changes to its combined manufacturing asset base or work force. JLG’s
global reach is extensive, with sales and service centers on six
continents, in addition to the three countries where it manufactures.
“Oshkosh has significant experience in the
aftermarket parts and service sector. We believe our global distribution
network and operational expertise will help us to increase JLG’s
non-equipment sales and expand services to their customers,”
added Bohn.
Conference Call and Webcast Information
Oshkosh Truck and JLG will host a joint conference call at 9:00 a.m.
Eastern Time on Monday, October 16, 2006, to discuss the transaction. To
participate in the conference call, please dial 877-709-8150. For
international parties, please dial 201-689-8354. There will also be a
live webcast of the conference call on www.oshkoshtruckcorporation.com.
The webcast will be archived on the company’s
web site for approximately 12 months.
About Oshkosh Truck
Oshkosh Truck Corporation is a leading designer, manufacturer and
marketer of a broad range of specialty commercial, fire and emergency
and military vehicles and bodies. Oshkosh's products are valued
worldwide by fire and emergency units, defense forces, municipal and
airport support services, and concrete placement and refuse businesses
where high quality, superior performance, rugged reliability and
long-term value are paramount.
Forward-Looking Statements
This press release contains statements that the Company believes to
be “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of
1995. All statements other than statements of historical fact,
including, without limitation, statements regarding the Company’s
future financial position, business strategy, targets, projected sales,
costs, earnings, capital expenditures, debt levels and cash flows, and
plans and objectives of management for future operations, are
forward-looking statements. When used in this press release,
words such as “may,”
“will,” “expect,”
“intend,” “estimate,”
“anticipate,” “believe,”
“should,” “project”
or “plan” or the
negative thereof or variations thereon or similar terminology are
generally intended to identify forward-looking statements. These
forward-looking statements are not guarantees of future performance and
are subject to risks, uncertainties, assumptions and other factors, some
of which are beyond the Company’s control,
that could cause actual results to differ materially from those
expressed or implied by such forward-looking statements. These
factors include the challenges of integrating acquired businesses
including JLG, the Company’s ability to
continue the turnaround of its Geesink Norba Group business, the
cyclical nature of the Company’s commercial
and fire and emergency markets, risks related to reductions in
government expenditures, the uncertainty of government contracts, the
availability of defense truck carcasses for remanufacturing, risks
associated with the implementation of an enterprise resource planning
system at McNeilus®;
the success of the Revolution®
composite concrete mixer drum, the availability of commercial chassis
and certain chassis components including engines, and risks associated
with international operations and sales, including foreign currency
fluctuations. In addition, the Company’s
expectations for fiscal 2007 are based in part on certain assumptions
made by the Company, including without limitation those relating to the
Company’s ability to integrate acquired
businesses including JLG and achieve targeted synergies; the Company’s
ability to continue the turnaround of the business of the Geesink Norba
Group sufficiently to support its current valuation resulting in no
non-cash impairment charge for Geesink Norba Group goodwill; the Company’s
ability to sustain flat operating income in the commercial segment and
to raise operating income in its fire and emergency segment in fiscal
2007 despite anticipated lower industry demand resulting from changes to
diesel engine emissions standards effective January 1, 2007; the Company’s
estimates for the level of concrete placement activity, housing starts
and mortgage rates; the performance of the U.S. and European economies
generally; the Company’s expectations as to
timing of receipt of sales orders and payments and execution and funding
of defense contracts; the Company’s ability
to achieve cost reductions and operating efficiencies, in particular at
McNeilus and the Geesink Norba Group; the anticipated level of
production and margins associated with the Family of Heavy Tactical
Vehicles contract, the Indefinite Demand/Indefinite Quantity truck
remanufacturing contract, the MTVR follow-on contract and international
defense truck contracts; the expected level of U.S. Department of
Defense procurement of replacement parts and services and funding
thereof; the Company’s estimates for capital
expenditures of municipalities for fire and emergency and refuse
products, of airports for aircraft rescue and snow removal products and
of large commercial waste haulers generally and with the Company;
federal funding levels for U.S. Department of Homeland Security and
spending by governmental entities on homeland security apparatus; the
availability of chassis components including engines and commercial
chassis generally; the Company’s planned
spending on product development and bid and proposal activities with
respect to defense truck procurement competitions and the outcome of
such competitions; the expected level of commercial “package”
body and purchased chassis sales compared to “body
only” sales; the Company’s
estimates of the impact of changing fuel prices and credit availability
on capital spending of towing operators; anticipated levels of capital
expenditures; the Company’s estimates for
costs relating to litigation, acquisition investigation, product
warranty, insurance, stock options and restricted stock awards,
personnel and raw materials; the Company’s
ability to negotiate expiring union contracts on a satisfactory basis;
and the Company’s estimates for debt levels,
interest rates, working capital needs and effective tax rates. Additional
information concerning these and other factors is contained in the
Company’s filings with the Securities and
Exchange Commission, including the Form 8-K filed today.
Additional Information and Where to
Find It
This press release may be deemed to be solicitation material in respect
of the proposed acquisition of JLG Industries by Oshkosh Truck. In
connection with the proposed acquisition, JLG Industries plans to file a
proxy statement with the SEC. INVESTORS AND SECURITY HOLDERS OF JLG
INDUSTRIES ARE ADVISED TO READ THE PROXY STATEMENT AND ANY OTHER
RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE
THOSE DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
ACQUISITION. The final proxy statement will be mailed to shareholders of
JLG Industries. Investors and security holders may obtain a free copy of
the proxy statement when it becomes available, and other documents filed
by JLG Industries with the SEC, at the SEC’s
web site at http://www.sec.gov. Free
copies of the proxy statement, when it becomes available, and JLG
Industries’ other filings with the SEC may
also be obtained from JLG Industries. Free copies of JLG Industries’
filings may be obtained by directing a request to JLG Industries, Inc.,
13224 Fountainhead Plaza, Hagerstown, Maryland 21742-2678, Attention:
Investor Relations.
Oshkosh Truck, JLG Industries and their respective directors, executive
officers and other members of their management and employees may be
deemed to be soliciting proxies from JLG Industries’
shareholders in favor of the proposed acquisition. Information regarding
Oshkosh Truck’s directors and executive
officers is available in Oshkosh Truck’s
proxy statement for its 2006 annual meeting of shareholders, which was
filed with the SEC on December 20, 2005. Information regarding JLG
Industries’ directors and executive officers
is available in JLG Industries’ proxy
statement for its 2006 annual meeting of shareholders, which was filed
with the SEC on October 2, 2006. Additional information regarding the
interests of such potential participants will be included in the proxy
statement and the other relevant documents filed with the SEC when they
become available.
Oshkosh Truck Corporation (NYSE: OSK):
-- $3.2 Billion, All-Cash Transaction Creates Global Specialty
Vehicle Manufacturer with $6 Billion in Revenue
-- JLG, Market Leader in Aerial Work Platforms and Telehandlers,
to Become Oshkosh Truck's Fourth Segment
-- Expected to be Accretive in First Year and to Generate
Significant Pre-Tax Synergies
Oshkosh Truck Corporation (NYSE: OSK) today announced it has
signed a definitive agreement to acquire JLG Industries, Inc. (NYSE:
JLG), 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 Corporation. 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 to 25 percent 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 United
States. 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," stated 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. 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," Bohn added.
Details of the Transaction
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
completed within ninety days.
Upon completion of the transaction, JLG will become the largest of
four business segments of Oshkosh. It continues the diversification of
the company. In fiscal 2008, the first full fiscal year of Oshkosh's
expected ownership of JLG, Oshkosh estimates that JLG will represent
approximately 40 percent of its consolidated sales and operating
income.
"We are pleased to be bringing a solid company like JLG into
Oshkosh Truck. 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," added Bohn.
JLG: A Market Leader in Aerial Access Equipment
JLG is the leading manufacturer of access equipment including
aerial work platforms and telehandlers. The company primarily serves
the construction market, with customers such as equipment rental
companies, construction contractors and other manufacturing or
industrial companies. The JLG portfolio of leading brands - JLG(R),
SkyTrak(R), Gradall(R) and Lull(R) - is renowned for its premium
quality, low total cost of ownership and advanced technologies. The
company also provides aftermarket support, including parts, service
and reconditioning.
JLG is the worldwide leader in aerial work platforms, including
boom lifts, scissor lifts and vertical mast lifts. These are marketed
under the JLG(R) brand and accounted for approximately half of JLG's
fiscal 2006 sales. JLG is also the North American leader, offering
multiple brands, in the sale of a broad line of telehandlers,
including all-wheel-steer, rear-pivot, traversing boom and
horizontal-loading designs for commercial and military applications.
During the past several years, JLG completed a major realignment
of its manufacturing facilities in the United States, Belgium and
France. Consequently, Oshkosh has no plans at this time to make any
significant changes to its combined manufacturing asset base or work
force. JLG's global reach is extensive, with sales and service centers
on six continents, in addition to the three countries where it
manufactures.
"Oshkosh has significant experience in the aftermarket parts and
service sector. We believe our global distribution network and
operational expertise will help us to increase JLG's non-equipment
sales and expand services to their customers," added Bohn.
Conference Call and Webcast Information
Oshkosh Truck and JLG will host a joint conference call at 9:00
a.m. Eastern Time on Monday, October 16, 2006, to discuss the
transaction. To participate in the conference call, please dial
877-709-8150. For international parties, please dial 201-689-8354.
There will also be a live webcast of the conference call on
www.oshkoshtruckcorporation.com. The webcast will be archived on the
company's web site for approximately 12 months.
About Oshkosh Truck
Oshkosh Truck Corporation is a leading designer, manufacturer and
marketer of a broad range of specialty commercial, fire and emergency
and military vehicles and bodies. Oshkosh's products are valued
worldwide by fire and emergency units, defense forces, municipal and
airport support services, and concrete placement and refuse businesses
where high quality, superior performance, rugged reliability and
long-term value are paramount.
Forward-Looking Statements
This press release contains statements that the Company believes
to be "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements other than
statements of historical fact, including, without limitation,
statements regarding the Company's future financial position, business
strategy, targets, projected sales, costs, earnings, capital
expenditures, debt levels and cash flows, and plans and objectives of
management for future operations, are forward-looking statements. When
used in this press release, words such as "may," "will," "expect,"
"intend," "estimate," "anticipate," "believe," "should," "project" or
"plan" or the negative thereof or variations thereon or similar
terminology are generally intended to identify forward-looking
statements. These forward-looking statements are not guarantees of
future performance and are subject to risks, uncertainties,
assumptions and other factors, some of which are beyond the Company's
control, that could cause actual results to differ materially from
those expressed or implied by such forward-looking statements. These
factors include the challenges of integrating acquired businesses
including JLG, the Company's ability to continue the turnaround of its
Geesink Norba Group business, the cyclical nature of the Company's
commercial and fire and emergency markets, risks related to reductions
in government expenditures, the uncertainty of government contracts,
the availability of defense truck carcasses for remanufacturing, risks
associated with the implementation of an enterprise resource planning
system at McNeilus(R); the success of the Revolution(R) composite
concrete mixer drum, the availability of commercial chassis and
certain chassis components including engines, and risks associated
with international operations and sales, including foreign currency
fluctuations. In addition, the Company's expectations for fiscal 2007
are based in part on certain assumptions made by the Company,
including without limitation those relating to the Company's ability
to integrate acquired businesses including JLG and achieve targeted
synergies; the Company's ability to continue the turnaround of the
business of the Geesink Norba Group sufficiently to support its
current valuation resulting in no non-cash impairment charge for
Geesink Norba Group goodwill; the Company's ability to sustain flat
operating income in the commercial segment and to raise operating
income in its fire and emergency segment in fiscal 2007 despite
anticipated lower industry demand resulting from changes to diesel
engine emissions standards effective January 1, 2007; the Company's
estimates for the level of concrete placement activity, housing starts
and mortgage rates; the performance of the U.S. and European economies
generally; the Company's expectations as to timing of receipt of sales
orders and payments and execution and funding of defense contracts;
the Company's ability to achieve cost reductions and operating
efficiencies, in particular at McNeilus and the Geesink Norba Group;
the anticipated level of production and margins associated with the
Family of Heavy Tactical Vehicles contract, the Indefinite
Demand/Indefinite Quantity truck remanufacturing contract, the MTVR
follow-on contract and international defense truck contracts; the
expected level of U.S. Department of Defense procurement of
replacement parts and services and funding thereof; the Company's
estimates for capital expenditures of municipalities for fire and
emergency and refuse products, of airports for aircraft rescue and
snow removal products and of large commercial waste haulers generally
and with the Company; federal funding levels for U.S. Department of
Homeland Security and spending by governmental entities on homeland
security apparatus; the availability of chassis components including
engines and commercial chassis generally; the Company's planned
spending on product development and bid and proposal activities with
respect to defense truck procurement competitions and the outcome of
such competitions; the expected level of commercial "package" body and
purchased chassis sales compared to "body only" sales; the Company's
estimates of the impact of changing fuel prices and credit
availability on capital spending of towing operators; anticipated
levels of capital expenditures; the Company's estimates for costs
relating to litigation, acquisition investigation, product warranty,
insurance, stock options and restricted stock awards, personnel and
raw materials; the Company's ability to negotiate expiring union
contracts on a satisfactory basis; and the Company's estimates for
debt levels, interest rates, working capital needs and effective tax
rates. Additional information concerning these and other factors is
contained in the Company's filings with the Securities and Exchange
Commission, including the Form 8-K filed today.
Additional Information and Where to Find It
This press release may be deemed to be solicitation material in
respect of the proposed acquisition of JLG Industries by Oshkosh
Truck. In connection with the proposed acquisition, JLG Industries
plans to file a proxy statement with the SEC. INVESTORS AND SECURITY
HOLDERS OF JLG INDUSTRIES ARE ADVISED TO READ THE PROXY STATEMENT AND
ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME
AVAILABLE BECAUSE THOSE DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED ACQUISITION. The final proxy statement will be
mailed to shareholders of JLG Industries. Investors and security
holders may obtain a free copy of the proxy statement when it becomes
available, and other documents filed by JLG Industries with the SEC,
at the SEC's web site at http://www.sec.gov. Free copies of the proxy
statement, when it becomes available, and JLG Industries' other
filings with the SEC may also be obtained from JLG Industries. Free
copies of JLG Industries' filings may be obtained by directing a
request to JLG Industries, Inc., 13224 Fountainhead Plaza, Hagerstown,
Maryland 21742-2678, Attention: Investor Relations.
Oshkosh Truck, JLG Industries and their respective directors,
executive officers and other members of their management and employees
may be deemed to be soliciting proxies from JLG Industries'
shareholders in favor of the proposed acquisition. Information
regarding Oshkosh Truck's directors and executive officers is
available in Oshkosh Truck's proxy statement for its 2006 annual
meeting of shareholders, which was filed with the SEC on December 20,
2005. Information regarding JLG Industries' directors and executive
officers is available in JLG Industries' proxy statement for its 2006
annual meeting of shareholders, which was filed with the SEC on
October 2, 2006. Additional information regarding the interests of
such potential participants will be included in the proxy statement
and the other relevant documents filed with the SEC when they become
available.