Oshkosh Truck Bids $3.2 Billion for JLG

Oshkosh Truck Corp., Oshkosh, Wis., announced today it has signed a definitive agreement to acquire all outstanding shares of JLG Industries, McConnellsburg, Pa., for $28 per share. Shares were last traded at $20.75 on the New York Stock Exchange. Total consideration, including transaction costs and assumed debt, is $3.2 billion in cash transaction on a fully diluted basis.

Upon completion of the transaction, which is expected to close within 90 days, JLG will become the largest of Oshkosh's four business segments and will create a $6 billion global specialty vehicle manufacturer. In fiscal 2008, the first full fiscal year of Oshkosh's expected ownership of JLG, Oshkosh estimates that JLG will represent approximately 40% of its consolidated sales and operating income.

“The acquisition of JLG is the latest broad-based initiative in the continuing transformation of Oshkosh Truck Corp.,” said Robert G. Bohn, Oshkosh's chairman, president, and chief executive officer. “It is aligned with our historic acquisition strategy as we expand into complementary markets, and it will be instrumental in building our global focus and scale that are increasingly needed to continue to be successful. It also meets our major acquisition criteria, which include market leadership, strong management, double digit growth opportunities, and the expectation of earnings in excess of our cost of capital.”

JLG had $2.3 billion in revenues during fiscal 2006 and has estimated a 20 to 25% increase in sales in fiscal 2007. Oshkosh annual sales for fiscal 2006 are about $3.4 billion. “This transaction is a good fit for JLG,” said William M. Lasky, chairman, president, and chief executive officer of JLG. “Oshkosh has a similar philosophy of offering premier products, creating strong market positions, and delivering after-sales service and support. For the JLG team, this combination offers additional growth opportunities. For our customers, JLG will become an even stronger partner in their future success. We look forward to working with the Oshkosh management team to ensure a rapid and seamless transition.”

During the past several years, JLG completed a major realignment of its manufacturing facilities in the United States, Belgium, and France. Consequently, Oshkosh has no plans at this time to make any significant changes to its combined manufacturing asset base or work force. JLG's global reach is extensive, with sales and service centers on six continents, in addition to the three countries where it manufactures.

“Oshkosh has significant experience in the aftermarket parts and service sector. We believe our global distribution network and operational expertise will help us to increase JLG's non-equipment sales and expand services to their customers,” Bohn said.

Transaction details

The transaction is expected to modestly grow Oshkosh's earnings per share in fiscal 2007 after non-cash charges relating to amortization of acquired intangibles and other accounting and transaction-related costs. Oshkosh will finance the transaction with a $3.5 billion senior credit facility provided by Bank of America, N.A. and JPMorgan Chase Bank, N.A. The acquisition has been approved by the board of directors of each company and is subject to customary closing conditions.

“We are excited about the addition of this market-leading, global company and expect a smooth integration into the Oshkosh family,” Bohn said. “At the same time, we expect to realize substantial purchasing and logistical synergies, while benefiting from JLG's already outstanding manufacturing operations. We have a long history of successful acquisitions and expect to build on that history.”