Alamo Group Inc., a publicly-traded corporation based in Seguin, Tex., has entered into an agreement with Stellex Capital Management to acquire all of the outstanding capital shares of Morbark LLC, a Winn, Mich. manufacturer of equipment and after-market parts for the recycling, biomass, forestry, tree maintenance and land management markets. Morbark products are marketed under the Morbark, Rayco, Denis Cimaf and Boxer Equipment brand names.
Total consideration for the purchase is about $352 million, Alamo said.
Alamo said Morbark President Dave Herr will continue in his role upon completion of the transaction that will make Morbark a part of Alamo’s Industrial Division led by Jeff Leonard.
“We are very pleased with the prospect of having Morbark join the Alamo Group,” said Ron Robinson, Alamo Group’s president and CEO. “Morbark is a well run, profitable and growing company in a sector that has been steadily improving. Their products expand and complement our range of vegetation maintenance equipment in an adjacent market. We are excited about the opportunities this acquisition will provide Alamo and we look to continue their existing strategic growth plan focused on product development and market expansion, supplemented with synergistic acquisitions. We also believe this acquisition will allow us to accelerate Morbark’s international growth plans with Alamo’s existing presence in areas such as Europe, as well as select markets such as Brazil and Australia. We believe the two companies will jointly benefit from various operational synergies as well. This combination will provide both a strategic fit and scale of operations that should benefit Alamo for the long term.”
Morbark’s annual sales were $225.5 million in 2018 and the company had trailing 12-month sales of $233 million as of the end of July 2019.
The acquisition, which is expected to close in the fourth quarter of 2019, is subject to a number of conditions, including the receipt of regulatory approvals and other pre-closing requirements.
Herr said the sale provides numerous benefits for Morbark.
“Employees, customers and dealers will notice no significant changes in their day-to-day work,” he said. “Being part of a publicly traded company provides long-term stability so we can continue our investments in equipment and products to promote continued growth. All of our brands have an excellent reputation in the industry and will be maintained with no changes. We will have a significant opportunity to leverage Alamo’s international presence to expand our sales and sourcing capabilities.”
Morbark, founded in 1957, has about 720 employees.
Since Stellex’s acquisition of Morbark in 2016, the company has successfully completed two acquisitions to expand its product offerings and geographic presence, Morbark said. In October 2017, Morbark acquired Rayco Manufacturing, a Wooster, Ohio-based manufacturer of stump cutters, crawler trucks, forestry mulchers, multi-tool carriers and aerial trimmers. In December 2018, Morbark acquired Denis Cimaf, a Roxton Falls, Que.-based manufacturer of industrial brushcutters and mulcher heads. With these acquisitions and other strategic improvements, Morbark has increased its headcount by more than 200 employees and revenue has nearly doubled.
“Together with Stellex, Morbark has achieved our strategic vision by greatly enhancing operations and implementing lean initiatives and best-in-class manufacturing practices that have resulted in new and improved redesigns, significant reductions in lead times, and improved delivery performance,” Herr said. “We are grateful for our time with Stellex and look forward to the next chapter as part of Alamo, an ideal suitor given its operating philosophy that will allow us to maintain our brands, operations, and successful momentum while further enhancing various operational synergies and accelerating international growth.”
Alamo Group said it is a leader in the design, manufacture, distribution and service of high quality equipment for infrastructure maintenance, agriculture and other applications. Its products include truck and tractor mounted mowing and other vegetation maintenance equipment, street sweepers, snow removal equipment, excavators, vacuum trucks, other industrial equipment, agricultural implements and related after-market parts and services.
The company, founded in 1969, has about 3,650 employees and operates 29 plants in North America, Europe, Australia and Brazil as of June 30, 2019.Follow us on social media:
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