Seguin, Texas-based Alamo Group Inc. has officially completed the previously announced acquisition of Morbark LLC and its affiliated brands, Rayco Manufacturing, Denis Cimaf and Boxer Equipment. The $352 million transaction closed in October.
Founded in 1957 and based in Winn, Michigan, with subsidiary operations in Wooster, Ohio, and Roxton Falls, Québec, Morbark has been a manufacturer of equipment and aftermarket parts for forestry, tree maintenance, biomass, land management and recycling applications for more than six decades. Morbark’s family of companies manufactures mobile equipment and aftermarket parts used for clearing and grinding/chipping and converting trees, wood and related organic waste in maintenance and recycling applications. The company, which has 720 employees, and its affiliate brands produce a full line of brush chippers, stump cutters, mini skid steers, forestry mulchers, aerial trimmers, whole tree and biomass chippers, flails, horizontal and tub grinders, sawmill equipment, material handling systems and mulcher head attachments for excavators, backhoes and skid steers.
Since it was acquired in 2016 by Stellex Capital Management, a middle-market private equity firm with offices in New York and London, Morbark has increased its headcount by over 200 employees, revenue has nearly doubled and EBITDA has increased over 200 percent, the company says. Additionally, Morbark successfully completed two add-on acquisitions to expand its product offerings and geographic presence. In October 2017, Morbark acquired Rayco Manufacturing, a Wooster-based manufacturer of stump cutters, crawler trucks, forestry mulchers, multi-tool carriers, brush chipper and aerial trimmers. In December 2018, Morbark acquired Denis Cimaf, a Roxton Falls-based manufacturer of industrial brush cutters and mulchers.
Morbark's 2019 trailing twelve month (TTM) results for the period ending Sept. 30 on an unaudited basis include net sales of $235.9 million and adjusted EBITDA of $39.8 million, Alamo says in a news release. The company adds that it believes Morbark is on track to achieve net sales for the full year of $245.0 million and adjusted EBITDA of $42.9 million.
“We are very pleased to have completed this acquisition, as Morbark is a strong fit with Alamo. Their products complement ours, and they have been growing steadily in a sector which should continue to perform well,” says Ron Robinson, Alamo Group’s president and chief executive officer commented. “As is our general practice, we intend to maintain the Morbark brands in the marketplace and are glad that Dave Herr, president of Morbark, will continue in that role as part of Alamo Group. This is an exciting opportunity for our company.”
In connection with this acquisition, Alamo has expanded its credit facility from $250 million to $650 million to accommodate the acquisition and the ongoing needs of the combined entities. The new credit facility has a five-year duration and consists of a $300 million term loan and a $350 million revolving line of credit. The new credit facility includes all of the banks involved in the previous arrangement, plus two new participants.