Alamo Group has entered into an agreement to acquire 100 per cent of the outstanding capital shares of Morbark, LLC.
Alamo will acquire the forestry equipment company for about US$352 million, subject to certain adjustments.
Morbark is a manufacturer of equipment and aftermarket parts for forestry, tree maintenance, biomass, land management and recycling markets.
The company’s products are marketed under the Morbark, Rayco, Denis Cimaf and Boxer Equipment brands.
Morbark annual sales
In 2018, Morbark’s annual sales reached $225.5 million, and the company had trailing 12-month sales of $233 million as of the end of July.
“We are very pleased with the prospect of having Morbark join the Alamo Group,” said Ron Robinson, Alamo Group’s president and chief executive officer. “Morbark is a well-run, profitable and growing company in a sector that has been steadily improving.”
The acquisition, which is expected to close in the fourth quarter of 2019, is subject to a number of conditions, including the receipt of regulatory approvals and other pre-closing requirements.
Morbark was created in 1957 and is based in Winn, Michigan with subsidiary operations in Wooster, Ohio and Roxton Falls, Quebec.
The company has about 720 employees, and their products include a range of tree chippers, grinders, flails and debarkers along with stump grinders, mulchers and brush cutters as well as aftermarket spare and wear parts.
“Their products expand and complement our range of vegetation maintenance equipment in an adjacent market,” Robinson said.
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“We are excited about the opportunities this acquisition will provide Alamo and we look to continue their existing strategic growth plan focused on product development and market expansion, supplemented with synergistic acquisitions. We also believe this acquisition will allow us to accelerate Morbark’s international growth plans with Alamo’s existing presence in areas such as Europe as well as select markets such as Brazil and Australia.”
Morbark is privately held and primarily owned by Stellex Capital Partners.
Morbark President Dave Herr will continue in his role upon completion of the transaction when the company will become a part of Alamo’s Industrial Division, led by Jeff Leonard.
In preparation for this closing, Alamo is working with its banking group to amend and expand its current credit facilities to accommodate this acquisition and meet the ongoing needs of the combined entities.
We believe the two companies will jointly benefit from various operational synergies as well,” Robinson said. “This combination will provide both a strategic fit and scale of operations that should benefit Alamo for the long term.”
Alamo Group, based in Seguin, Texas, manufactures a variety of equipment, including truck and tractor mounted mowing and other vegetation maintenance equipment, street sweepers, snow removal equipment, excavators, vacuum trucks, industrial equipment, agricultural implements and related after-market parts and services.
The company, founded in 1969, has about 3,650 employees and operates 29 plants in North America, Europe, Australia and Brazil.