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6/16/2016 Dan Ellington | Category: Industry News | 860 Views | 0 Comments |

Douglas Dynamics Announces Agreement to Acquire Dejana Truck and Utility Equipment for $206 Million


Well it looks like one of the biggest players in the snow removal industry, Douglas Dynamics, just got significantly larger through the acquisition of Dejana Truck and Utility Equipment. Like all manufacturers and dealers of snow removal equipment Douglas Dynamics is vulnerable to “warm winters” but with this new acquisition, they are making strides to strengthen the company overall by transitioning into a year round powerhouse. Recently we have seen some consolidation within the snow removal industry with lawn care giant Toro acquiring Boss and European snow manufacturer The Ash Group acquiring Meyer Products.

Douglas Dynamics, Inc. PLOW 2.45%, North America's premier manufacturer of vehicle attachments and equipment, today announced it has entered into a definitive agreement to acquire Dejana Truck and Utility Equipment (Dejana) for $206 million, including a $26 million performance earn out provision. The transaction is subject to customary regulatory approvals and other closing conditions and is expected to close during the third quarter of 2016.

Acquisition Highlights:

  • Acquisition would significantly strengthen position as a premier manufacturer and up fitter of vehicle attachments and equipment
  • Increasing exposure to Class 4-6 trucks would round out capabilities across all commercial work vehicle segments, providing growth opportunities
  • Adding Dejana is expected to diversify revenue and reduce influence of weather
  • Company plans to utilize DDMS to help Dejana continue its strong growth trajectory, with five consecutive years of growth
  • Deal is expected to close in Third Quarter 2016 and be accretive to earnings in 2017

Over the past 59 years, Dejana has grown organically to become the premier up fitter of Class 4-6 trucks and other commercial work vehicles in the Eastern U.S. Dejana also is a leading specialized manufacturer of storage solutions for trucks and vans and cable pulling equipment for trucks. Dejana is a well-run family-owned business that has a long track record of growth and a strong reputation within the truck equipment industry. Dejana has built strong relationships with leading truck OEMs over more than 25 years and is considered a trusted partner for up fitting all types of commercial work vehicles. Dejana generated net sales of $145 million over the trailing twelve months ending March 31, 2016.

The acquisition of Dejana is a natural extension and expansion of the up fit strategy initiated with the Henderson Products acquisition at the end of 2014. By increasing its exposure to Class 4-6 trucks the Company, is both focusing on its core competencies and rounding out its capabilities across all commercial work vehicle segments, providing meaningful opportunities for growth.

"The addition of such a high quality company as Dejana will significantly strengthen our position as a premier manufacturer and up fitter of vehicle attachments and equipment. The deal provides a new complementary portfolio of services and products to drive deeper customer relationships, and expands our geographic footprint in the Eastern U.S.," said James L. Janik, Chairman, President, and Chief Executive Officer of Douglas Dynamics, Inc. "The deal is the logical next step in our stated M&A strategy to accelerate growth. By expanding into a broader arena of commercial work vehicle operations we will diversify and expand our revenue and continue to reduce the influence of weather on our overall business."

"On behalf of my father, Pete Dejana, who founded our company in 1957, and the rest of the Dejana family, we are pleased to be joining such a great organization as Douglas Dynamics," said Andrew Dejana, President of Dejana, "We are very proud of the legacy we have built and are happy that the Dejana name will continue to provide innovative, best in class, cost effective solutions for many years to come. We look forward to working with the Douglas team to build upon the successful partnership we have developed over the past 25 years."

By utilizing the Company's proprietary Douglas Dynamics Management System (DDMS), the Company plans to assist Dejana to continue its growth trajectory and deliver industry leading service levels. The Company expects DDMS implementation to continue to drive cost savings and margin improvement through global sourcing and procurement.

Once the deal is completed, the Dejana management team, including its President, Andrew Dejana, will continue to lead Dejana. The acquisition is expected to be accretive to earnings per share on a full-year basis in 2017. Douglas Dynamics intends to fund the acquisition through a combination of cash, ABL revolver draw and an expansion of its existing term loan agreement.

Dejana maintains seven manufacturing and up fit facilities that encompass 240,000 square feet of work space on over 90 acres of property in the North East and Mid-Atlantic regions. Dejana currently employs approximately 500 people in five states and current customers include leading utility, energy, telecommunications and transportation companies, as well as large municipal entities.


About Douglas Dynamics

Home to the most trusted brands in the industry, Douglas Dynamics is North America's premier manufacturer of vehicle attachments and equipment. For more than 65 years, the Company has been innovating products that not only enable people to perform their jobs more efficiently and effectively, but also enable businesses to increase profitability. Our commitment to continuous improvement enables us to consistently produce the highest quality products and drive shareholder value. The Douglas Dynamics portfolio includes snow and ice management attachments sold under the FISHER®, WESTERN®, HENDERSON® and SNOWEX® brands.

About Dejana Truck and Utility Equipment

Over the past 59 years, Dejana has grown organically to become the premier up fitter of Class 4-6 trucks and other commercial work vehicles in the Eastern U.S. Dejana also is a leading specialized manufacturer of storage solutions for trucks and vans and cable pulling equipment for trucks. Dejana is a well-run family-owned business that has a long track record of growth and a strong reputation within the truck equipment industry. Dejana has built strong relationships with leading truck OEMs over more than 25 years and is considered a trusted partner for up fitting all types of commercial work vehicles. Dejana generated net sales of $145 million over the trailing twelve months ending March 31, 2016.


About Central Parts Warehouse

As a leading distributor of America’s most trusted snow and ice brands including Western, Fisher, SnowEx, Boss, Meyer and Snowdogg, Central Parts Warehouse is recognized as the definitive source for information, products and customer support in North America.  For more than 25 years, the company has been supplying quality OEM and Aftermarket parts and delivering them with speed and accuracy.

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