Oshkosh, Wis.-based Oshkosh will pay $28 a share for McConnellsburg, Pa.-based JLG. That's a 35% premium to JLG's Friday closing price of $20.75. 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 Oshkosh chief Robert G. Bohn. "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."
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 and JPMorgan Chase Bank and retire most of JLG's outstanding debt.
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.