Smeal Purchased By Michigan Company For $36.3 Million

One of Neligh's largest manufacturers has been aquired by a Michigan company. 

It was announced Tuesday morning that Smeal Fire Apparatus, based in Snyder with a plant in Neligh, has been aquired by Spartan Motors for $36.3 million, according to Daryl Adams, President and Chief Executive Officer of Spartan Motors.

The status of the Neligh location has not been detailed at this time. 

Neligh Director of Economic Development Greg Ptacek believes Spartan Motors and the community of Neligh will find the move extremely beneficial.

"Spartan Motors is a well-respected company that shares the same core values as Smeal. We're excited about the opportunities that could arise from this merger," Ptacek said. "The City of Neligh is confident that Neligh's hard working workforce and the newly refurbished location will serve Spartan Motors for decades to come. We look forward to welcoming Spartan Motors into our community with open arms."

Spartan Motors, Inc. is a global leader in specialty chassis and vehicle design, manufacturing and assembly.
Spartan Motors purchased Smeal and its subsidiaries 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, which is expected to be more than offset by tax benefits accruing to the Company.

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.
 
Smeal is expected to generate 2016 revenues of approximately $100 million, which includes approximately $30 million of Spartan chassis sold to Smeal. The newly combined Spartan Emergency Response business unit will rank as one of the top-four North American fire apparatus manufacturers and will be well positioned, in an increasingly consolidating industry, to provide a robust and respected portfolio of leading products, services, and technologies.

Today, 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. The acquisition of Smeal is a logical next step in the longstanding relationship between the two companies, which spans more than 30 years.
 
“We look forward to adding Smeal’s industry-leading product portfolio and manufacturing expertise to Spartan’s, while expanding on a decades-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.”
 
Adams continued, “We are pleased that Smeal chose Spartan Motors as their partner to carry on their brand’s legacy, as we take our supplier relationship to the next level. Spartan Motors is prepared to lead the consolidation charge in the fire apparatus market as strategic opportunities present themselves, and this acquisition represents a deliberate and strategic decision to accelerate the turnaround of Spartan’s Emergency Response business unit. Importantly, we also preserve a large, longstanding chassis customer relationship and protect the interests of their dealer channel, as we expand our dealer network across the U.S. and Canada and simultaneously accelerate our goal of becoming the leader in the fire apparatus market.” 
 
Founded in 1955, Snyder, Neb.-based Smeal and its subsidiaries, U.S. Tanker Co. and Ladder Tower Co., are leaders and innovators in fire truck manufacturing and vehicle technology, offering a full line of aerial ladders and platforms (including Squrt®, TeleSqurt®, and Snorkel®), tractor-drawn aerials (TDAs), pumpers, stainless steel tankers and wildland urban interface vehicles (WUI).  Today, Smeal operates facilities located in Snyder and Neligh, Neb.; Delavan, Wis.; and Ephrata, Pa. 
 
“Spartan Motors is the perfect fit for Smeal, our customers, our employees, and our operational leadership team, as we combine with a proven ally and industry leader to help solidify our future and preserve the legacy of the Smeal organization,” said Rod Cerny, Smeal’s Chairman of the Board. “As part of a larger, profitable and well-capitalized public company, we will have the working capital necessary to ensure continued investment in product development and make sure the Smeal brand is able to deliver the exceptional products and service our dealers, departments, and municipality customers have come to expect.” 
 
Acquisition Highlights:
·         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 acquisition is expected to be accretive to earnings for Spartan Motors in 2017 through a combination of operating efficiency efforts and synergies
·         Smeal’s (including U.S. Tanker Co. and Ladder Tower Co.) notably superior aerial ladder, platform, and TDA product portfolio enhances and complements Spartan’s and brings industry-leading product technology to an important, high-performance product subset
·         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 U.S. and all of Canada
·         Smeal is expected to add approximately $70 million in annual revenue (excludes $30 million of Spartan chassis sold to Smeal) to the Company’s Emergency Response segment, and positions Spartan Emergency Response as one of the top-four fire apparatus manufacturers in the U.S. and Canada
·         Smeal is expected to generate positive EBITDA in 2016
·         The transaction will be initially financed with Spartan Motors’ recently amended $100 million line of credit