Terex ( TEX) agreed to acquire A.S.V. ( ASVI), a maker of compact rubber truck loaders, for roughly $488 million.
The news sent shares of both companies jumping Monday. A.S.V. was soaring $5.47, or 44.5%, to $17.76, while Terex was climbing $2.97, or 5.6%, to $55.90. The deal calls for Terex to pay $18 a share for Minnesota-based A.S.V., representing a 46% premium over the stock's close Friday. The deal will be effected through a tender offer and is expected to close in the first quarter. Terex, based in Westport, Conn., makes construction and infrastructure equipment such as cranes, excavators and aerial work platforms. The company, which had revenue of $8.58 billion in the past 12 months, expects A.S.V. to add $220 million to $250 million to its annual sales. "ASV is a leader in compact track loader technology and with the global reach of Terex, we see tremendous opportunity for expanding ASV product sales," said Ronald DeFeo, Terex chairman and chief executive, in a statement. "The ASV acquisition is an excellent strategic and cultural fit and provides a great addition to our product offerings as Terex continues to grow as a global construction equipment manufacturer."