In the United States (US), Alamo Group Inc., a leading international designer, manufacturer, distributor, and service provider of equipment and machinery for infrastructure maintenance, agriculture, and other applications, has announced that it has completed the previously announced acquisition of Morbark, LLC, a former portfolio company of Stellex Capital Management, for a total consideration of approximately US$352 million, on a debt-free basis and subject to certain post-closing adjustments.
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According to a statement, the acquisition was completed on October 24, 2019. Morbark is a leading manufacturer of equipment and aftermarket parts for the forestry tree maintenance, biomass, land management, and recycling markets. Their products include a broad range of tree chippers, grinders, flails, debarkers, stump grinders, mulchers, and brush cutters along with related aftermarket spare and wear parts.
Morbark products are sold through a network of independent dealers with about 300 sales locations. The company, with approximately 720 employees, is based in Winn, Michigan, with subsidiary operations in Wooster, Ohio and Roxton Falls, Quebec, Canada. The deal includes the products sold under the Morbark, Rayco, Denis Cimaf, and Boxer brand names.
Net sales for 2018 adjusted for the full year effect of Morbark’s acquisition of Denis Cimaf, which took place in December 2018, was US$225.5 million on an unaudited basis and the company is believed to be on track to achieve net sales for the full year ending December 31, 2019, although actual results may differ materially from this current estimate.
We are very pleased to have completed this acquisition as Morbark is a strong fit with Alamo. Their products complement ours and they have been growing steadily in a sector which should continue to perform well. As is our general practice, we intend to maintain the Morbark brands in the market place and are glad that Dave Herr, President of Morbark, will continue in that role as part of Alamo Group. This is an exciting opportunity for our Company, commented Ron Robinson, Alamo Group’s President, and CEO upon the
In connection with this acquisition, Alamo has expanded its credit facility from US$250 million to US$650 million to accommodate this event and the ongoing needs of the combined entities. The new credit facility has a five-year duration and consists of a US$300 million term loan and a US$350 million revolving line of credit. The new credit facility includes all of the banks involved in the previous arrangement, plus two new participants.