WESTPORT, Conn.--(BUSINESS WIRE)--July 20, 2000--
Net Proceeds Will be Used to Repay $125 Million of Long-Term Debt
Terex Corporation (NYSE:TEX) today announced that it has signed a definitive agreement to sell its truck-mounted forklift businesses to Partek Cargotec, a subsidiary of Partek Corporation of Finland, for $144 million in cash.
The units to be divested by Terex include the truck-mounted forklift unit of Powerscreen (Moffett) that was acquired in mid-1999 and the Princeton/Kooi units that were acquired from Allegheny Teledyne in late 1999. The transaction, which is subject to customary regulatory approvals, is expected to close in the third quarter.
"This transaction creates strategic and financial benefits for both Terex and Partek," said Ronald M. DeFeo, Terex's Chairman and Chief Executive Officer. "Moffett and Princeton/Kooi, which operate primarily in the building material industry, have customers and distribution that have little or no overlap with the current range of Terex Lifting products. Partek's Cargotec unit, which does not manufacture truck-mounted forklifts, currently distributes Moffett products in the United States and France and also manufactures articulated cranes, a complementary product to truck-mounted forklifts."
Mr. DeFeo continued, "Partek's attractive cash offer represents a substantial premium to the combined price that Terex paid for these assets less than one year ago. This transaction came about as a result of our ongoing portfolio reassessment and our willingness to sell assets that we believe have increased significantly in value under Terex's stewardship. The approximately $125 million of after-tax proceeds will be used to repay long-term bank debt. This divestiture, which is accretive using an enterprise valuation approach, will materially improve our leverage ratio and reduces goodwill by approximately $65 million." Including this transaction, Terex will have reduced its long-term debt by $175 million, so far this year.
Terex Corporation is a diversified global manufacturer based in Westport, Connecticut, with expected 2000 revenues in excess of $2 billion. Terex is involved in a broad range of construction, infrastructure and mining-related capital equipment operating in two segments -- Terex Earthmoving and Terex Lifting. Terex Earthmoving manufactures and sells heavy-duty off-road trucks and high-capacity surface mining trucks under the brand names of Terex, Unit Rig and Payhauler, as well as large hydraulic mining shovels under the brand name O&K. Terex entered the infrastructure building business in 1999 with the acquisitions of Powerscreen and Cedarapids. Terex Lifting manufactures and sells telescopic mobile cranes, lattice boom cranes, tower cranes, aerial work platforms, utility aerial devices, telescopic material handlers, truck mounted lift trucks, truck mounted cranes, and related products, under the brand names Terex, Lorain, PPM, P&H, Franna, Marklift, Koehring, Bendini, Simon, RO, Telelect, Square Shooter, Holland Lift, American, Italmacchine, Peiner, Comedil, Matbro, Moffett, Kooi and Princeton.
Certain information in this announcement includes forward-looking statements regarding future events or the future performance of the Company that involve certain contingencies and uncertainties. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual events or performance to differ materially from those reflected in such forward-looking statements. Such risks and uncertainties, many of which are beyond the Company's control, include, among others: the effects of changes in laws and regulations; the effect of interest rates, government spending and general economic conditions on construction and mining activity; the national and international political climate; and other factors, risks and uncertainties set forth in more detail in the Company's public filings. Actual events or performance may differ materially from any forward-looking statement due to these and other risks, uncertainties and significant factors.
CONTACT: Jack Lascar, Vice President, 203/222-5943