WESTPORT, Conn., Jun 28, 2001 (BUSINESS WIRE) -- Terex Corporation (NYSE: TEX)
announced today that it has signed a definitive merger agreement with CMI
Corporation (NYSE: CMI).
The merger agreement provides for an exchange of all the outstanding shares of
CMI, at an exchange rate of 0.16 share of Terex common stock for each share of
CMI common stock, subject to a downward adjustment in the event the consolidated
net debt of CMI exceeds $75.25 million at closing. As a result of this
transaction, Terex is expected to issue a maximum of approximately 3.5 million
shares of its common stock to CMI shareholders. The transaction, which is
subject to customary closing conditions including CMI shareholder and regulatory
approval, is expected to close during the third quarter of 2001.
CMI is a leading manufacturer of a broad range of leading-edge automated
machines for the construction and maintenance of highways, city streets and
county roads, parking lots and bridges, with 2000 revenues in excess of $225
million. Products include asphalt and concrete mixing plants, road profiling and
reclaiming equipment, concrete paving systems and landfill compactors and
grinders. CMI has a strong competitive position with over 70 percent of its
revenues derived from products that have either the number one or number two
market share positions in their markets. The great majority of CMI products are
marketed to customers engaged in road and bridge building and infrastructure
development markets Terex already serves. In addition, CMI is the leading
domestic manufacturer of lightweight concrete paving and maintenance equipment.
"The acquisition of CMI is an excellent fit with our strategy of continuing to
build the quality of the Terex franchise and to diversify the product range
available to our customer base," said Ronald M. DeFeo, Chairman and Chief
Executive Officer. "CMI is a strong operational fit for our growing
infrastructure business. The combination of Cedarapids and CMI's hot mix asphalt
businesses will create a very strong number two player in this industry. CMI
also has a recycling grinder and compactor business, a perfect fit with Terex
Recycling's trommel screening products. CMI would also put us into two new
product categories: road profiling and reclaiming equipment and concrete paving
and plants, which combined with Cedarapids pavers should give us the broadest
roadbuilding product offering in the U.S."
Ron DeFeo added, "Following on the 1999 acquisitions of Powerscreen and
Cedarapids, CMI provides Terex with leading positions in several growing
markets, including the construction and maintenance of highways and bridges,
road infrastructure development and airport runway expansion. This transaction
is expected to be slightly dilutive for the remainder of this year and to be
accretive to Terex's earnings in 2002, given the current performance and
expected margin improvement opportunities at CMI. With revenues in excess of
$225 million, we expect substantial operational and distribution synergies with
the resulting improvements in CMI's cost structure as we initially improve
operations at CMI and then integrate it with Terex and its North American
infrastructure business."
Ron DeFeo continued, "While the near-term revenue performance for most
construction-related equipment is challenging, improved fiscal conditions at all
levels of government and mandated increases in federal road and infrastructure
spending over the next several years should allow for continued growth in demand
for road-building and infrastructure equipment."
Fil Filipov, Terex Executive Vice President, will assume full responsibility for
CMI as President. This is the first acquisition under the new Terex organization
structure, which will initially place separate operational focus on the business
prior to full integration with the balance of the operations. This will allow
Terex to both capture and maintain the unique cultural and operational
advantages of CMI while simultaneously allowing the Terex business model and
philosophy to be introduced and implemented. Commented Fil Filipov, "CMI has
excellent long-term customer relationships that stem from its outstanding sales
and service support. CMI also has a tradition of product innovation and has also
recently introduced lean manufacturing in their operations. Terex has the
ability to build on this strong foundation while improving the operating
efficiency of the overall enterprise."
Additional Information and Where to Find It
Terex intends to file a registration statement with the SEC on Form S-4 in
connection with the merger and Terex and CMI expect to mail a proxy
statement/prospectus to CMI's shareholders containing information about the
merger. Investors and security holders are urged to read the registration
statement and the proxy statement/prospectus carefully when they are available.
The registration statement and the proxy statement/prospectus will contain
important information about Terex, CMI, the merger, and related matters.
Investors and security holders will be able to obtain free copies of these
documents, when available, through the web site maintained by the SEC at
http://www.sec.gov. In addition to the registration statement and the proxy
statement/prospectus, Terex and CMI file annual, quarterly, and special reports,
proxy statements, and other information with the SEC. You may read and copy any
reports, statements, and other information filed by Terex and CMI at the SEC
public reference rooms at 450 Fifth Street, NW, Washington, D.C. 20549 or at the
SEC's other public reference rooms in New York, New York and Chicago, Illinois.
Please call the SEC at 800-SEC-0330 for further information on public reference
rooms. Terex's and CMI's filings with the SEC are also available to the public
from commercial document-retrieval services and the web site maintained by the
SEC at http://www.sec.gov.
Safe Harbor Statement
The above contains forward-looking information based on Terex's current
expectations. Because forward-looking statements involve risks and
uncertainties, actual results could differ materially. Such risks and
uncertainties, many of which are beyond Terex's control, include, among others,
the sensitivity of construction and mining activity to interest rates,
government spending, downward economic cycles and general economic conditions;
the success of the integration of acquired businesses; the retention of key
management; foreign currency fluctuations; pricing, product initiatives, and
other actions taken by competitors; the ability of suppliers to timely provide
parts and components on a cost competitive basis, and the ability of Terex to
timely manufacture and deliver cost competitive products to customers; the
effect of changes in laws and regulations, including environmental laws and
regulations; the continuing use of net operating loss carryovers; the effect of
debt and restrictive covenants; and other factors, risks and uncertainties more
specifically set forth in Terex's public filings with the SEC. The
forward-looking statements herein speak only as of the date of this release.
Terex expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statement included in this release
to reflect any changes in Terex's expectations with regard thereto or any
changes in events, conditions, or circumstances on which any such statement is
based.
Terex Corporation is a diversified global manufacturer based in Westport,
Connecticut, with 2000 revenues in excess of $2 billion. Terex is involved in a
broad range of construction, infrastructure, recycling and mining-related
capital equipment under the brand names of Terex, Unit Rig, Payhauler, O&K,
Fermec, Benford, Powerscreen, Finlay, B.L. Pegson, Simplicity, Cedarapids,
Grayhound, Jaques, Canica-Jaques, Lorain, PPM, P&H, Franna, Marklift, Koehring,
Bendini, RO, Telelect, Square Shooter, American, Italmacchine, Peiner, Comedil,
Matbro, Amida, Bartell, Coleman, Muller and Morrison. More information on Terex
can be found at www.terex.com
CONTACT:
Terex Corporation, Westport
Kevin O'Reilly
Vice President, Investor Relations and Corporate Communications
Phone: (203) 222-5943
Fax: (203) 222-0130
Email: koreilly@terex.com