- Purchase price of $2.0
billion; $1.725 billion net of
expected tax benefits
- Reduces cyclicality, delivers financial accretion and lowers
capital intensity
- Expected to Unlock ~$25
million of cost and revenue synergies by 2026
- Enhances presence in waste & recycling segment; expands
North American addressable market
NORWALK,
Conn., Oct. 8, 2024 /PRNewswire/ -- Terex
Corporation (NYSE: TEX) ("Terex" or "Company") today announced
completion of its acquisition of Environmental Solutions Group
("ESG") from Dover Corporation (NYSE: DOV). Terex anticipates that
ESG will drive increased revenue growth, free cash flow, earnings
before interest, taxes, depreciation, and amortization ("EBITDA")
margin, and EPS accretion. The transaction is expected to be
double-digit percentage adjusted EPS accretive in 2025, with
meaningful growth thereafter. The all-cash transaction is for
$2.0 billion, or $1.725 billion when adjusted for the present
value of expected tax benefits of approximately $275 million. The
acquisition represents approximately 8.4x 2024E earnings before
interest, taxes, depreciation, and amortization (EBITDA) including
expected run-rate synergies. With ESG, Terex will now derive 67% of
its total revenue from North
America, an increase from 61% based on trailing 12 months
results ended Q2 2024.
ESG has demonstrated a track record of consistent, resilient
growth, delivering a 7%+ long-term organic revenue compound annual
growth rate ("CAGR") over the past 10 years. ESG holds the #1
position in North America in
refuse collection vehicles, waste compaction equipment, and
associated parts and digital solutions. ESG's industry-leading
product brands include Heil, Marathon, Curotto-Can, Bayne Thinline,
and Parts Central as well as digital solutions offerings 3rd Eye
and Soft-Pak. ESG's turnkey products and services across equipment,
digital, and aftermarket offerings are complementary to Terex's
businesses, and will allow Terex to expand its customer base,
providing customers with a broader suite of environmental equipment
solutions, and realizing economies of scale.
Simon Meester, Terex President and CEO said: "We're delighted
to welcome ESG into the Terex family of businesses. ESG is a
non-cyclical, financially accretive, market-leading business that
will complement and strengthen Terex's portfolio with synergies in
the fast-growing waste and recycling end market. ESG is led by a
world-class management team and has a strong track record of
operational excellence. We look forward to working with ESG to
drive long-term, sustainable value for all our stakeholders."
Mr. Meester added that Patrick
Carroll, President of Environmental Solutions Group for the
past 14 years, will continue in that role. Mr. Carroll has
extensive experience leading manufacturing businesses including
serving as President of Terex Utilities from 2001 through
2005.
Julie Beck, Terex SVP and CFO
said: "This acquisition significantly strengthens Terex's portfolio
and creates a path for accelerated, sustainable growth. ESG has
demonstrated a sustained track record of resilient, high-single
digit organic growth through the cycle. Its EBITDA margin including
run rate synergies is expected to add 140 basis points of margin
accretion. ESG's efficient operating model with low net working
capital will drive a meaningful improvement in free cash flow
accretion. And finally, Terex expects ~$25 million of identified
synergies to be achieved by the end of 2026.
Mr. Carroll said: "At ESG, our vision has always been to improve
the lives of our team members, our customers, and our communities.
We are looking forward to becoming part of Terex, because we see it
as a great cultural fit with opportunities to expand our positive
impact. We are looking forward to greater scale and access to new
markets."
Advisors
UBS Investment Bank served as exclusive
financial advisor and Fried Frank and Pryor Cashman served as legal
advisors to Terex.
About Terex
Terex Corporation is a global industrial
equipment manufacturer of materials processing machinery, waste and
recycling solutions, mobile elevating work platforms (MEWPs), and
equipment for the electric utility industry. We design, build, and
support products used in maintenance, manufacturing, energy,
minerals and materials management, construction, waste and
recycling, and the entertainment industry. We provide best-in-class
lifecycle support to our customers through our global parts and
services organization, and offer complementary digital solutions,
designed to help our customers maximize their return on their
investment. Certain Terex products and solutions enable customers
to reduce their impact on the environment including electric and
hybrid offerings that deliver quiet and emission-free performance,
products that support renewable energy, and products that aid in
the recovery of useful materials from various types of waste. Our
products are manufactured in North
America, Europe, and
Asia Pacific and sold worldwide.
For more information, please visit www.terex.com.
About ESG
Environmental Solutions Group ("ESG")
encompasses industry-leading brands, such as Heil, Marathon, 3rd
Eye, Soft-Pak, Parts Central, Currotto-Can, and Bayne Thinline to
create a premier, fully integrated equipment group serving the
solid waste and recycling industry. Through extensive
voice-of-customer outreach, in-house engineering and manufacturing
capabilities, a wide-reaching service network, and proven industry
expertise, ESG is focused on solving customer problems through
environmentally responsible products and providing world-class
support.
Forward Looking Statements
Certain
information in this press release includes forward-looking
statements (within the meaning of Section 27A of the Securities Act
of 1933, Section 21E of the Securities Exchange Act of 1934 and the
Private Securities Litigation Reform Act of 1995) regarding future
events or Terex's future financial performance that involve certain
contingencies and uncertainties, including those discussed in the
Company's Annual Report on Form 10-K for the year ended December
31, 2023, and subsequent reports the Company files with the U.S.
Securities and Exchange Commission from time to time, in the
sections entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations – Contingencies and
Uncertainties." In addition, when included in this press release,
the words "may," "expects," "should," "intends," "anticipates,"
"believes," "plans," "projects," "estimates," "will" and the
negatives thereof and analogous or similar expressions are intended
to identify forward-looking statements. However, the absence of
these words does not mean that the statement is not
forward-looking. The Company has based these forward-looking
statements on current expectations and projections about future
events. These statements are not guarantees of future performance.
Such statements are inherently subject to a variety of risks and
uncertainties that could cause actual results to differ materially
from those reflected in such forward-looking statements.
Actual events or the actual future results of Terex may
differ materially from any forward-looking statement due to these
and other risks, uncertainties and material factors. The
forward-looking statements speak only as of the date of this
release. Terex expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any forward-looking
statement included in this release to reflect any changes in
expectations with regard thereto or any changes in events,
conditions, or circumstances on which any such statement is
based.
Contact Information
Derek
Everitt
VP Investor Relations
Email: InvestorRelations@Terex.com
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SOURCE Terex Corporation
