By Carrie Pitzer
Smeal Fire Apparatus is officially part of Spartan Motors.
Daryl Adams, president and CEO of Spartan Motors, said the acquisition was officially finalized Monday. Adam said he’s excited about the acquisition and having the two companies now working under the same umbrella.
“This transaction marks a significant event for our company, and we are excited to add Smeal’s industry-leading product portfolio and manufacturing expertise to Spartan Motors,” Adams said. “The addition of Smeal complements our own Spartan emergency response business unit while also allowing us to provide an expanded, innovative product offering to both new and existing customers. We expect the transaction to be accretive to 2017 earnings and accelerate the turnaround of the Spartan emergency response business unit.”
Smeal, which has a factory on the east edge of Neligh, was acquired last month for approximately $36.3 million (subject to a customary net working capital adjustment), the company’s forgiveness of certain liabilities owed by Smeal to Spartan Motors and a subsequent tax gross-up payment, which is expected to be more than offset by tax benefits accruing to the company.
Smeal generated 2016 revenues of approximately $100 million, which includes approximately $30 million of Spartan chassis sold to Smeal. According to Adams, the newly combined Spartan emergency response business unit will rank as one of the top-four North American fire apparatus manufacturers in an increasingly consolidating industry.
With its expanded geographic reach spanning 44 states in the U.S., 10 provinces and 3 territories in Canada, the Adams said Spartan Motors is even better positioned to deliver a robust and respected portfolio of leading products, services, and technologies to its broad range of customers, including original equipment manufacturers and dealers.
As a $100 million manufacturer of fire apparatus, Smeal’s reputation and branding are key highlights of the acquisition. In fact, Adams said Smeal’s facilities - including the Neligh location - will not only remain open, but they will continue to have the Smeal Fire Apparatus name.
"Give credit to the Smeal family. They wanted to make sure the plants would stay where they are at and we'd keep the Smeal name," Adams said. "That's actually not a problem for us because we like the brand and think it's important. The only thing that might change is on the sign it might read 'Spartan Motors Company' at the bottom in small print."
As for the changes planned for the Neligh location, Adams said they echo the vision of the company, which is product-focused plants with Neligh building aerials. He said Smeal is dominant in aerials and has been building them for 50 years, compared to Spartan’s 10 years.
Adams said he visited the Neligh facility during the due diligence process and was impressed by the recent equipment expansion.
“With the Neligh plant, they had great plans for it, as we do," Adams said. "They wanted to start building aerials up there. They bought a new piece of laser equipment and were trying it out while I was there. It's going to make them more efficient, so we're excited to have both of those plants."
Adams said the Snyder plant, which has been the home office of Smeal, is going to be an aerial plant with Neligh offering support “in a bigger way than it ever has because we believe we'll get a lot of orders. We're going to move all of our ladder products to the Snyder plant, and we're going to be building the pumper.”