Jul 20 2004
ASV Inc. announced today that it has signed a non-binding letter of intent to acquire all the outstanding common stock of Loegering Mfg. Inc. of Casselton, North Dakota for a combination of cash and ASV common stock. Loegering, a 33-year-old company, is the original manufacturer and a leader in over-the-tire steel tracks for wheeled skid-steers and also provides attachments for the skid-steer market. In addition, Loegering has developed new, proprietary technology – the Versatile Track System® (VTS®) – a bolt on bolt off track system that will convert most skid-steers from wheels to rubber tracks. Pending due diligence, ASV anticipates it will complete the transaction in the third quarter of 2004. ASV anticipates the transaction will be accretive to earnings. Loegering had sales of approximately $12 million in 2003 and anticipates sales in the range of $16-20 million for 2004.
“Loegering, like ASV, has strong entrepreneurial roots,” said ASV CEO Gary Lemke. “We were attracted to Loegering because of its employees, product lines and distribution system and because both companies share similar values. We believe there are significant synergies that can be obtained in the areas of purchasing, manufacturing, marketing and distribution."
Loegering employs approximately 60 people at its facility in Casselton, near Fargo, ND. Loegering sells its track systems and attachments through over 800 independent dealers throughout North America.
Loegering President Brad Williams will continue to oversee day-to-day operations. “ASV is a dynamic, fast-growing company that can help Loegering take the next step,” he said. “We look forward to a strong partnership that will benefit both companies.”
According to Lemke, ASV will provide additional marketing support for the VTS® track system. Unlike its over-the-tire track systems, the VTS® will entirely replace the wheels on a skid-steer through a quick and easy conversion. This product will target the vast number of current skid-steer owners who will now be able to upgrade their existing wheeled machinery to rubber tracks.
“For skid-steer owners who are not ready to buy a dedicated rubber track loader, the VTS® track system should provide many of the benefits of rubber track loaders,” said Lemke. “We see this system as a way to bring greater numbers of wheeled machine owners into the rubber track loader family, which should benefit both ASV and Loegering.”
Rubber track loaders are one of the fastest-growing segments of the construction equipment market and have gained a strong foothold in the $2 billion skid-steer market. Loegering expects it will introduce the VTS® track system in the second half of 2004.
The transaction is subject to due diligence by ASV, negotiation of a definitive acquisition agreement and satisfaction of other customary conditions to closing.
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