UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 13, 1999
JLG INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Commission file number: 0-8454
PENNSYLVANIA
25-1199382
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
1 JLG Drive, McConnellsburg, PA
17233-9533
(Address of principal executive
offices)
(Zip Code)
Registrant's telephone number, including area code:
(7l7) 485-5161
Not Applicable
(Former name of former address, if changed since last report)
Item 5. Other Events
n May 11, 1999, the Company issued the attached press release with respect to
its definitive agreement to purchase all the outstanding stock of Gradall
Industries, Inc.
Item 7. (c) Exhibits
(99) Text of press release dated May 11, 1999
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JLG INDUSTRIES, INC.
(Registrant)
Date: May 13, 1999
/s/ Charles H. Diller, Jr.
Charles H. Diller, Jr.
Executive Vice President and
Chief Financial Officer
Exhibit 99
FOR IMMEDIATE RELEASE
JLG Industries Contact: Juna Rowland
Director, Corporate Relations
(717) 485-6605
Gradall Industries Contact: Andrea Phillips
Corporate Communications
(330) 339-2212 Ext 154
JLG INDUSTRIES, INC. ANNOUNCES DEFINITIVE AGREEMENT TO ACQUIRE
GRADALL INDUSTRIES, INC.
Providing a Broadened Product Line and Expanded Customer Base
Combined Annual Revenues Approaching $800 Million
Expected to be Accretive to EPS in the First Full Year of Combined Operations
McConnellsburg, PA, and New Philadelphia, OH, May 11, 1999 - JLG Industries,
Inc. (NYSE: JLG) and Gradall Industries, Inc. (NASDAQ: GRDL) today announced
the signing of a definitive agreement under which JLG will acquire Gradall
Industries, Inc. in an all-cash transaction for $20.00 per share, representing
a 14 percent premium to yesterday's closing price and resulting in total cash
to Gradall shareholders of approximately $200 million. The transaction will
create a diversified capital equipment manufacturer with combined revenues
approaching $800 million for the most recent four fiscal quarters and is
expected to be accretive to JLG earnings per share in the first full year of
combined operations. "A well established company with a leading brand name,
Gradall brings to the table strong market share and a reputation for high
quality products," said L. David Black, JLG's Chairman of the Board, President
and Chief Executive Officer. "This acquisition brings JLG closer to our
immediate goal of becoming a $1 billion company. The increased size and
expanded product breadth will further enhance our ability to compete in a
consolidating rental industry marketplace and position JLG for future growth
opportunities, both domestically and internationally and is an excellent
transaction for the stakeholders of both companies. The transaction not only
combines two leading capital equipment brands with strong market shares,
but also fits well with our diversification strategy. There is a tremendous
opportunity within our respective markets to grow and expand the presence of
both entities."
Barry L. Phillips, Gradall's President and Chief Executive Officer, stated,
"Gradall and JLG have similar corporate cultures and a common goal of being
the best in our respective industries. We expect to benefit from JLG's global
market strength. We also anticipate leveraging our product development and
anufacturing expertise. Gradall looks forward to being a part of the JLG
family. From a marketplace perspective, the strengths of our organizations are
complementary and we target many of the same markets and share customers so we
can leverage existing relationships. We are very excited about the prospects
for cross-selling opportunities."
The strategic reasons for this transaction are compelling for both companies
and include the following key elements:
Addition of Growth Segment - Gradall's material handler product line will allow
JLG to access one of the most dynamic and fastest growing product segments in
the construction and industrial equipment industry.
Market Channel Leverage - Using their respective distribution strengths, the
combined companies will further solidify their market position as a prime
supplier to the North American rental industry.
Core Competency Leverage - Similarities between Gradall's products and those
of JLG will allow JLG to leverage its core competencies in manufacturing,
engineering, new product development, distribution and industry-leading sales
and support services.
Related Diversification - The transaction will allow JLG to diversify its
operations in accordance with its strategic plan. JLG's and Gradall's product
lines are complementary, yet respond, in part, to different domestic and
international economic cycles. The addition of Gradall's excavator product
line can be expected to add a measure of consistency and counter-cyclicality to
the overall product portfolio since Gradall's over-the-road highway-speed
xcavators are used extensively by state, county and local governments and by
private highway contractors for infrastructure construction, maintenance and
repair. Gradall's excavator business is expected to benefit from the passage of
the Federal Highway Bill (TEA-21) that guarantees a minimum of $167 billion in
spending for the highway program over the next six years (a 40 percent increase
from the 1991 Federal Highway Bill).
Brand Strength - Gradall's products, like those of JLG, are known for quality,
reliability and durability. Its excavators have set the industry standard for
more than half a century and its material handlers boast unique
performance-enhancing features. The combined companies will offer a broad
portfolio of products, each with brand name recognition and identification with
quality.
Capacity - The acquisition of Gradall adds significantly to JLG's overall
manufacturing capacity. Gradall's existing New Philadelphia, Ohio operation
has more than 430,000 square feet under one roof and its recently acquired
Orrville, Ohio facility provides more than 300,000 square feet of additional
space.
This transaction, including the refinancing of the pre-acquisition outstanding
debt of both companies, will be financed using a $250 million five-year
revolving credit facility. Commenting on the transaction financing, Mr. Black
added, "As you know, JLG has historically been a debt-averse organization.
This fiscal conservatism is now paying off as we are in a comfortable position
to finance this transaction. Once the acquisition is complete, our total debt
to total capitalization will be less than 50 percent and we expect comfortable
EBITDA to interest expense coverage. Furthermore, given the current low
interest rate environment and the negligible amount of debt currently on our
balance sheet, leveraging our borrowing power is the expedient approach,
particularly in today's environment where we believe that JLG's value is not
being adequately recognized by the equity market."
The transaction is expected to be completed during the fourth quarter of JLG's
1999 fiscal year (which ends July 31st) and is subject to customary conditions,
including regulatory antitrust clearance and the tender of a majority of
Gradall's shares. Gleacher & Co. LLC is acting as advisor to JLG in the
transaction and Merrill Lynch & Co. is acting on behalf of Gradall.
JLG Industries, Inc. is the world's leading manufacturer, distributor and
international marketer of mobile aerial work platforms. Sales are made
principally to distributors and rental companies, which rent and sell the
Company's products to a diverse customer base, which includes users in the
industrial, commercial, institutional and construction markets. Headquartered
in McConnellsburg, Pennsylvania, JLG has two additional manufacturing
facilities in Bedford, Pennsylvania and sales and service locations in Europe
and Australia.
Founded in 1946 and headquartered in New Philadelphia, Ohio, Gradall
Industries, Inc. is a leading manufacturer of rough-terrain, variable-reach
material handlers and telescoping hydraulic excavators used in infrastructure,
residential, non-residential and institutional construction and is one of the
industry's most widely recognized brand names. Gradall's variable-reach
material handlers accounted for approximately 60 percent of their 1998 total
net sales. The company is one of the market leaders in this segment, with its
variable-reach material handlers presently ranking among the top three in
market share in North America. Gradall's excavator business is an industry
leader in the road maintenance and infrastructure markets in much the same way
as JLG has achieved a leadership position in the aerial workplatform market.
Excavators represented nearly 30 percent of Gradall's 1998 total net sales.
The forward-looking statements in this announcement may involve certain risks
and uncertainties, including cyclical demand, a consolidating customer base,
product liability, availability of product components and others, as detailed
in the Company's SEC reports, including the report on Form 10-Q for the quarter
ended January 31, 1999. In addition, there are inherent risks in consummating
the transaction and executing the strategy that it entails. These risks
include the difficulty of integrating two business organizations and achieving
potential business and operational synergies and interest rate market risks and
other risks associated with the transaction financing. Additional risks that
should be considered for the combined entities are described in the reports of
Gradall filed with the SEC.
For a fax copy, please call 800-758-5804, extension 470675.
