Blog Coverage Spartan Motors to Acquire Manufacturer of Fire Apparatus

Upcoming AWS Coverage on Navistar International Post-Earnings Results

LONDON, UK / ACCESSWIRE / December 14, 2016 / Active Wall St. blog coverage looks at the headline from global leader in specialty chassis and vehicle design, manufacturing, and assembly, Spartan Motors, Inc. (NASDAQ: SPAR). The company announced on December 13, 2016, that its wholly-owned subsidiary, Spartan Motors USA, Inc., has entered into a definitive agreement to acquire Smeal Fire Apparatus Co. (“Smeal”) and its subsidiaries. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

One of Spartan Motors’ competitors within the Trucks & Other Vehicles space, Navistar International Corp. (NYSE: NAV), will report its Q4 FY16 financial results on Tuesday, December 20, 2016. AWS will be initiating a research report on Navistar International in the coming days.

Today, AWS is promoting its blog coverage on SPAR; touching on NAV. Get all of our free blog coverage and more by clicking on the links below:

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Details of the Transaction

As per terms of Agreement, Spartan Motors will acquire, industry-leading North American innovator and manufacturer of fire apparatus, Smeal for $36.3 million, subject to certain net working capital adjustments, the Company’s forgiveness of certain liabilities owed by Smeal to the Company, and a subsequent tax gross-up payment. The acquisition will enable Spartan Motors to strengthen its Emergency Response business, gain scale and geographic reach in the industry, and accelerate its Emergency Response business unit turnaround plan. The transaction is expected to close in January 2017, subject to customary closing conditions.

Spartan Motors expects Smeal to generate 2016 revenues of approximately $100 million, which includes approximately $30 million of Spartan chassis sold to Smeal. Smeal is expected to add approximately $70 million in annual revenue (excluding $30 million of Spartan chassis sold to Smeal) to the Company’s Emergency Response segment. The transaction will position Spartan Emergency Response as one of the top-four fire apparatus manufacturers in the US and Canada. Spartan’s Emergency Response business unit engineers and builds fire truck cabs and chassis for many of the industry’s leading original equipment manufacturers (OEMs), including Smeal, as well as designs and manufactures complete fire apparatus.

“We look forward to adding Smeal’s industry-leading product portfolio and manufacturing expertise to Spartan’s, while expanding on a decade-long successful partnership,” said Daryl Adams, President and Chief Executive Officer of Spartan Motors, “We expect the acquisition to be accretive to earnings in 2017 and bring significant scale to our Emergency Response vehicle portfolio, which will help accelerate the turnaround of the Spartan Emergency Response business unit. It also expands the geographic reach of our dealers, benefits all of our customers by expanding our product offerings, and brings an additional portfolio of leading technology and expertise to the market.”

Acquisition Highlights

Spartan Motors in the press release noted that the acquisition is a positive and compelling strategic fit for both companies and is an important step in securing the Company’s market leadership in an increasingly consolidating industry. The deal is expected to be accretive to earnings for Spartan Motors through a combination of operating efficiency efforts and synergies.

The combined Company will have 47 dealers in 44 states, 10 provinces, and 3 territories, giving Spartan Emergency Response the ability to serve customers in the entire US and all of Canada. The transaction will be initially financed with Spartan Motors’ $100 million line of credit.

Stock Performance

Following the announcement, Spartan Motors’ share price finished yesterday’s trading session at $9.35, rising 2.75%. A total volume of 136.39 thousand shares exchanged hands. The stock has rallied 57.35% and 171.06% in the last six months and past twelve months, respectively. Furthermore, since the start of the year, shares of the company have skyrocketed 205.05%. The stock has a dividend yield of 1.07% and currently has a market cap of $314.72 million.

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