Oshkosh to Buy JLG Industries

Continuing its buying spree, the Wisconsin based Oshkosh Truck Corp. has announced that it will acquire JLG Industries Inc. in an all cash for $3 billion.

Oshkosh Truck Corp. specializes in making military vehicles along with fire & emergency and commercial vehicles. The firm has been looking to diversify its base and has in the last 10 years taken control of 14 companies. It has bought names like McNeilus Cos., a maker of garbage-truck bodies; Pierce Manufacturing Inc., one of the world's leading fire truck manufacturer and tow truck maker Jerr-Dan Corp. among many others. With a fairly healthy balance sheet the firm’s stats stood at net income of $160.2 million on revenues of $2.6 billion for the fiscal session ending 30th September, 2005.

On the other side of the deal is JLG Industries Inc. based in McConnellsburg, Pennsylvania. Founded in 1969, it is a well know construction and equipment making organization. With products ranging from booms to scissor lifts and telehandlers, their sales of the firm had risen by about 32% to reach a figure of $2.29 billion.

Now looking at the deal, which is expected to be around $3.2 billion will be completed in 90 days. The board members of both the firms have agreed on a common ground formally but approval from the shareholders of JLG is still pending. Oshkosh will pay $28 per share, which is a premium of 35% on the current market price of $20.75 a share. Oshkosh will also assume some debts. A credit of $3.5 billion for the transaction will be provided by The Bank of America and JP Morgan Chase Bank.

"We respect the companies, we respect their culture, and then we grow the heck out of them," Oshkosh Chairman, President and Chief Executive Robert Bohn said.

Bill Lasky, JLG chairman, president and CEO, said the acquisition is a "great combination of two great companies," and "It hits the ball out of the park,"

The deal will give Oshkosh a turnover of $6 billion annually and the company’s strength will touch 13,000 employees. It will also make the JLG unit the largest amongst the four segments accounting for over 40% of consolidated sales and operating revenue. Oshkosh expects the deal to add to earnings in fiscal 2007 after non-cash charges relating to amortization of acquired intangibles and other accounting and transaction-related costs. The shares of Oshkosh rose to $55.57 by about 37 cents.