Terex Sells ASV Products to Manitex, Buys Manitex Shares | Construction News

Terex Corp. has agreed to sell 51% of ASV Inc. to Manitex International, resulting in a joint venture in compact track and skid steer loaders (51% owned by Manitex; 49% by Terex). Included in the transaction is ASV's Grand Rapids, Minn., manufacturing facility and certain assets held at Terex's Southaven, Miss., distribution center.

The transaction is expected to result in more than $125 million of cash received by Terex, including cash from a recapitalization of ASV prior to closing and a significant amount in tax benefits. Upon completion of the transaction, ASV will continue to sell its compact track and skid steer loaders under the Terex brand.  The transaction is expected to be completed before the end of 2014.

"The formation of this joint venture is a positive for both Terex and ASV," said Ron DeFeo, Terex chairman and CEO. "Terex preserves its broad compact equipment product offering and its participation in an expected housing recovery. Manitex will augment ASV's existing distribution channels, allowing for faster growth of the ASV business."  

In a separate  transaction, Terex will use a portion of the cash it receives as a result of the ASV sale to acquire $12.5 million of newly issued Manitex common shares and $7.5 million of convertible debt securities. "We have sold businesses to Manitex and profitably owned their equity in the past," DeFeo said. "They are a good aggregator and operator of machinery businesses, and we look forward to extending our value creating relationship."