Terex buys Genie
Terex Corporation has signed an agreement and plan of merger with Genie Holdings Inc. The price is $75 million and brings Terex back into the powered access market more than two years after it announced that it wished to exit the sector. Terex is understood to be looking at building access equipment in France.
The style of Terex's return to the powered access market reflects comments by senior executives at the time that the corporation's powered access division was not big enough to play a major role in the market. At that time there were suggestions that Terex had tried to buy a major manufacturer but had been thwarted.
The purchase of Genie, which last year had total revenues of $575 million, propels Terex into the powered access major league.
"The acquisition of Genie is an excellent opportunity for us and meets all of our acquisition criteria," commented Ronald M. DeFeo, Terex Chairman and Chief Executive Officer. "Genie is a strong global brand with significant market share, and this acquisition diversifies our product offering with the addition of a complete line of aerial work platforms. This is a business sector that three to four years ago had too many manufacturers and too much manufacturing capacity. However, the market has since corrected this imbalance and today Genie is one of two significant players in North America and three in Europe."
In contrast to the last time that Terex was active in the powered access business, Genie is not expected to join Terex's crane business which is headed by Fil Filipov. Instead there is expected to be a separate division that will be headed by the existing Genie management team.
"The management team at Genie has done an excellent job building the Genie business and franchise over the years and are a welcome addition to the Terex family," said Mr. DeFeo. "Bob Wilkerson will continue with the company as President of Genie, helping us to grow the aerial work platform business and deliver value to our shareholders. In fact, the management team at Genie have already identified and implemented $25 million in annualized cost savings that will directly benefit Terex shareholders."
"I am excited about being part of the Terex management team and a Terex shareholder," said Mr. Wilkerson. "This transaction provides Genie the opportunity to grow this business, especially in Europe, and I believe the global reach and financial strength of Terex and the manufacturing capabilities now available to Genie in Europe will provide a better platform to be more competitive."
Among proposals being considered by Terex is the possibility of building Genie platforms in Europe - a possible location would be the former PPM Cranes factory at Montceau-Les-Mines in France's Burgundy region. Terex recently completed an agreement to purchase Demag Mobile Cranes, this deal is expected to be completed during August, and this could create capacity at Montceau.
"The Terex franchise has grown significantly over the years, primarily through acquisition," noted Mr. DeFeo. "With the proposed acquisition of Genie and the pending Demag acquisition, which we expect to close during the third quarter of 2002, Terex's pro forma 2001 revenues would be approximately $3.4 billion, clearly making Terex one of the largest companies in the construction and mining business".
Terex still owns one small part of its former access business, a factory previously owned by Simon which is in Cork, Ireland. The company recently sold Holland Lift, a manufacturer of large scissor lifts, to a group of US investors.