Published in Breaking News

Spartan Motors inks $36M deal with fire truck manufacturer

BY MiBiz Staff Tuesday, December 13, 2016 12:01pm

CHARLOTTE — Spartan Motors Inc. has acquired Smeal Fire Apparatus Co. of Snyder, Neb. in a deal that will position Spartan as the fourth largest manufacturer of fire trucks and components in North America.

The $36.3 million deal will wrap Smeal — which is projected to generate $100 million in revenue in 2016 — under Charlotte-based Spartan Motors’ (Nasdaq: SPAR) Emergency Response business unit and will be financed through a $100 million line of credit, according to a statement.

For Spartan Motors, the deal comes as part of a multi-year strategy that aims to turn the company around after facing performance issues for a number of years.

“The company has struggled in the past,” Daryl Adams, president and CEO of Spartan told MiBiz. “This will be the first time since 2008 that we’ve been profitable in all four quarters.”

The company closed 2015 with a net income loss of nearly $17 million, according to the company’s financial statements. By contrast, Spartan Motors generated $7.6 million in net income during the first nine months of its 2016 fiscal year, which ends Dec. 31.

All told, Spartan Motors expects Smeal to add approximately $70 million in additional revenues and $500,000 in earnings before interest, taxes, depreciation and amortization, said Rick Sohm, chief financial officer at 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,” Adams said in a statement.

The deal with Smeal will increase Spartan Motor’s distribution by adding a network of 47 dealers across 44 states, as well as three territories and ten provinces in Canada.

“Part of the desire for the acquisition is their dealer base which really solidifies our coverage across all of the U.S and Canada,” Adams said.

Spartan Motors plans to keep its eyes open for additional deals going forward, but Adams notes the company will spend the next year integrating Smeal’s operation.

“Things are moving quick in all of our industries,” he said. “We want to be opportunistic and keep our eyes open to see what’s out there.”

Editor's Note: This story has been updated to reflect comments by Spartan Motor's President and CEO Daryl Adams to MiBiz. 

Read 1992 times Last modified on Friday, 16 December 2016 17:05