JLG prepares for life under Oshkosh

24 April 2008

Oshkosh Corp chairman and chief executive officer Bob Bohn.

Oshkosh Corp chairman and chief executive officer Bob Bohn.

Oshkosh announced the deal on 16 October having initiated takeover talks with JLG in August, and has agreed to pay US$3.2 (€2.56) billion or $28 per share, a premium of about 35%. The deal, which could be completed within days of the shareholders’ vote on 4 December, will see JLG retain its identity and branding and become one of four specialist divisions within Oshkosh, which will become a combined $6 billion (€4.8 billion) business with 13000 employees.

JLG’s president and chief executive officer, Bill Lasky, said in a conference call that JLG had not been for sale; “When I was approached by [Oshkosh], quite candidly, at the beginning I was hoping to find a reason why it wouldn’t be a good fit for JLG...that didn’t last very long when I looked at the success and track record of Oshkosh.” No other potential buyers were contacted and JLG was not offered for “auction” following Oshkosh’s initial approach.

The big attraction for Oshkosh is that it diversifies its business beyond the defence, fire and rescue and commercial sectors. “We believe that the business cycle that JLG moves with is going to provide a very significant balance to our current business offering”, said Bob Bohn, chairman, president and chief executive officer of Oshkosh. The acquisition is the latest of 15 made by Oshkosh in the past 10 years, during which time its revenues have grown from under $500 million to the current $3.4 billion.

One major JLG customer, Malcolm Jackman, chief executive officer of Coates Hire in Australia, told AI he could see no problems in the deal and that “on balance” it will be positive; “in these good times there is likely to only be an upside. However, in tougher times it will be important for Oshkosh to ensure that JLG...gets the level of resources and support to continue to give customers the level of frontline service that we have come to expect”. (For more reaction see box story on this page).

JLG’s new owner operates businesses including the Oshkosh branded specialty defence and truck vehicles, US truck loader crane manufacturer IMT, aerial ladder and fire fighting specialist Pierce Manufacturing, concrete truck supplier McNeilus, European refuse truck maker Geesink Norba Group in Sweden and The Netherlands, and Italian airport fire truck manufacturer BAI. The greatest technical synergies are likely to be between JLG and Pierce.

Oshkosh has manufacturing facilities in the US, Canada, Italy, Sweden and The Netherlands, but said it had no current plans to close any of the JLG facilities. The company said that “key JLG people, we think, are going to stay with us”.

Mr Lasky said JLG remained on target to grow revenues by between 20 and 25% in its current fiscal year.

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