Terex Completes Acquisition of Environmental Solutions Group from Dover Corporation

Source: www.gulfoilandgas.com 10/8/2024, Location: North America

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.


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