Generac to Acquire Ottomotores Businesses
November 20 2012 - 5:41PM
Business Wire
Generac Holdings Inc. (NYSE: GNRC), a leading designer and
manufacturer of back-up power generation products, announced today
that one of its subsidiaries has signed a definitive share purchase
agreement to acquire from a subsidiary of TT electronics plc all of
the shares of Ottomotores UK Limited and its affiliates, including
the operations of Ottomotores Mexico and Ottomotores Brazil,
(collectively “Ottomotores”) for $46.5 million in cash, subject to
certain closing net asset adjustments.
Founded in 1950 and headquartered in Mexico City, Ottomotores
Mexico is a leading manufacturer of power generation equipment in
Mexico and other parts of Latin America. Ottomotores Brazil,
located in Curitiba, recently entered the Brazilian market and has
been steadily gaining traction in one of Latin America's fastest
growing markets. The combined Ottomotores businesses have more than
500 employees and generated revenues of $81.6 million in fiscal
2011.
“Ottomotores is a terrific strategic fit for Generac’s business,
providing immediate scale for our international expansion efforts,”
said Aaron Jagdfeld, President and Chief Executive Officer of
Generac. “This acquisition is directly in line with our Powering
Ahead strategic plan and positions Generac to participate in the
significant global market that exists for commercial and industrial
backup power generation by offering products tailored to the needs
of customers in individual international markets.”
The acquisition of Ottomotores provides a platform for future
growth in additional markets outside North America through
Ottomotores’ broad product offering of higher output power products
and strong, established distribution network.
“We at Ottomotores are very excited about this transaction,”
said Francisco Haro, Managing Director of Ottomotores Mexico. “With
both companies having a long history in their own markets and deep
expertise in the backup power generation business, we believe that
there are many synergies and opportunities to grow with the
combination of these companies.”
“We welcome the entire Ottomotores team to the Generac family,”
said Jagdfeld. “We are looking forward to working closely together
with such an experienced management team to create a formidable
backup power generation company serving global markets.”
Following the close of the transaction, Ottomotores’ management
team will continue to lead the company and Generac will maintain
the Ottomotores brand name in the market place. It is expected that
the transaction will close before the end of January 2013 pending
receipt of all customary and required regulatory approvals. The
combined companies will employ more than 2,800 people globally.
Generac company news is available24
hours a day, on-line at:
http://www.generac.com.
About Generac (NYSE: GNRC)
Since 1959, Generac has been a leading designer and manufacturer
of a wide range of generators and other engine powered products. As
a leader in power equipment serving residential, light commercial,
industrial and construction markets, Generac's power products are
available through a broad network of independent dealers,
retailers, wholesalers and equipment rental companies. The Company
markets and distributes its products primarily under its Generac
and Magnum brand names.
About Ottomotores UK Limited
Ottomotores is a leader in the manufacture of generating sets in
Mexico and Latin America with exports to Middle East, Far East, and
Africa. Manufacturing generator sets in the range of 15kW up to
2500kW for standby application as well as prime power or continuous
running, Ottomotores has a broad product offering to meet any
application or specification. For more information on Ottomotores,
please visit http://www.ottomotores.com.mx.
Forward-looking
Information
Certain statements contained in this news release, as well as
other information provided from time to time by Generac Holdings
Inc. or its employees, may contain forward looking statements that
involve risks and uncertainties that could cause actual results to
differ materially from those in the forward looking statements.
Forward-looking statements give Generac's current expectations and
projections relating to the Company's financial condition, results
of operations, plans, objectives, future performance and business.
You can identify forward-looking statements by the fact that they
do not relate strictly to historical or current facts. These
statements may include words such as "anticipate," "estimate,"
"expect," "forecast," "project," "plan," "intend," "believe,"
"confident," "may," "should," "can have," "likely," "future" and
other words and terms of similar meaning in connection with any
discussion of the timing or nature of future operating or financial
performance or other events.
Any such forward looking statements are not guarantees of
performance or results, and involve risks, uncertainties (some of
which are beyond the Company's control) and assumptions. Although
Generac believes any forward-looking statements are based on
reasonable assumptions, you should be aware that many factors could
affect Generac's actual financial results and cause them to differ
materially from those anticipated in any forward-looking
statements, including:
- demand for Generac products;
- frequency and duration of major power
outages;
- availability, cost and quality of raw
materials and key components used in producing Generac
products;
- the impact on our results of the
substantial increases in our outstanding indebtedness and related
interest expense due to the dividend recapitalization completed in
May 2012;
- the possibility that the expected
synergies, efficiencies and cost savings of the acquisition of the
Magnum Products business in October 2011, or any future
acquisitions, will not be realized, or will not be realized within
the expected time period;
- the risk that the Magnum Products
business or other acquisitions that we make will not be integrated
successfully;
- competitive factors in the industry in
which Generac operates;
- Generac's dependence on its
distribution network;
- Generac's ability to invest in, develop
or adapt to changing technologies and manufacturing
techniques;
- loss of key management and
employees;
- increase in product and other liability
claims; and
- changes in environmental, health and
safety laws and regulations.
Should one or more of these risks or uncertainties materialize,
Generac's actual results may vary in material respects from those
projected in any forward-looking statements. A detailed discussion
of these and other factors that may affect future results is
contained in Generac's filings with the U.S. Securities and
Exchange Commission (“SEC”).
Any forward-looking statement made by Generac in this press
release speaks only as of the date on which it is made. Generac
undertakes no obligation to update any forward-looking statement,
whether as a result of new information, future developments or
otherwise, except as may be required by law.
SOURCE: Generac Holdings Inc.
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