Acquisition of leading Latin American generator manufacturers
accelerates global expansion efforts – Businesses provide an enhanced
platform and immediate scale for future international growth
WAUKESHA, Wis.--(BUSINESS WIRE)--Nov. 20, 2012--
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
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
“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
“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.
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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.
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
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.
Source: Generac Holdings Inc.
Generac Holdings Inc.
York A. Ragen
Chief Financial Officer
Director – Finance and Investor Relations