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JLG Industries Inc. Completes Purchase of OmniQuip, Begins Integration of Telehandler Production

Tue August 12, 2003 - National Edition
CEG



MCCONNELLSBURG, PA, (BUSINESS WIRE) JLG Industries Inc. announced it has completed the purchase of the OmniQuip business unit of Textron. JLG purchased the assets of Trak International Inc., which include all operations relating to the Sky Trak and Lull brand telehandler products, for a purchase price of $100 million. Sales for the purchased operations in calendar year 2002 totaled approximately $217 million.

"We are pleased that this transaction has been completed in such a short time period," said Bill Lasky, chairman of the board, president and chief executive officer. "We have formed a dedicated integration team which has developed a comprehensive plan designed to fully integrate the OmniQuip operations into JLG. To this end, today, we have communicated our vision for the integration with the OmniQuip people and have announced our intended closing of the Port Washington, WI, facility with the process to begin in October and to be completed over the following 12 months. The Mendota Heights, MN, facility closure is expected to be completed concurrently over a nine-month period. However, we expect to retain the best people, particularly within the engineering and military contract staff, as well as continue the operations at the Oakes, ND, facility. With our successful transfer of our own telehandler production from our Orrville, OH, facility into our McConnellsburg operations last year, we have an experienced team to implement our integration plan for the Sky Trak and Lull brand machines."

"These identified ’hard’ synergies represent ongoing cost savings of approximately $27 million annually. Furthermore, expected ’soft’ synergies from common components, product designs and distribution channels will result in additional savings going forward. When combined with JLG’s industry-leading after-sales and support services, these synergies will offer our customers significantly increased value."

Commenting on the overall financial impact, Jim Woodward, executive vice president and chief financial officer stated, "The integration plan involves moving the telehandler production to our Pennsylvania facilities and, as a result, we will incur estimated expenditures totaling approximately $45 million over a four-year period. In addition to the $100 million purchase price, we will capitalize approximately $24 million associated with personnel reductions, facility closings and other restructuring costs, while approximately $21 million in increased pre-tax costs is associated with integration expenses such as plant start up costs and facility operating expenses that will impact the income statement. However, ongoing savings from hard synergies after the absorption of integration costs will result in approximately $27 million annually."

"From a revenue mix standpoint, the impact on JLG is significant - reducing the dependency on aerial work platforms with a better balance between aerials and telehandlers. This acquisition further enhances JLG’s position as an industry leader and provides our customers with a broader choice of products and services," Woodward said.

The Port Washington, WI, Mendota Heights, MN, and Oakes, ND, facilities represent approximately 500,000, 40,000 and 78,000 sq. ft. (46,452, 3,716 and 7,246 sq m) of space, respectively and employ a total of approximately 530 people.