Rush Enterprises Acquires Assets Of Lake City International
Mar 30, 2010 12:17 PM
Rush Enterprises, Inc. (NASDAQ: RUSHA and RUSHB), which operates the largest network of commercial vehicle dealerships in North America and two John Deere construction equipment dealerships in southeast Texas, announced that it signed an agreement to purchase certain assets of Lake City Companies, LLC, and certain of its subsidiaries and affiliates, which operate a commercial truck, bus and agricultural equipment sales, service, parts, finance and leasing business representing multiple brands, including International, Autocar, Mitsubishi Fuso, IC Bus and Collins Bus.
Rush Enterprises also announced it intends to group the management of its Rush Truck Centers into a Peterbilt division that will be responsible for the operations of Rush’s dealerships that sell and service products manufactured by Peterbilt Motors Company and a Navistar division responsible for the operations of Rush’s dealerships that represent products manufactured by Navistar, Inc., including International trucks and IC buses. The senior management team of each new division will report directly to W.M. “Rusty” Rush, President and Chief Executive Officer of Rush Enterprises, but the two divisions will otherwise remain operationally independent from one another.
Lake City International currently operates five dealerships in Utah, five dealerships in Idaho and a dealership in Oregon. The proposed acquisition would expand the company's contiguous network of Rush Truck Centers and would result in the Company operating 60 Rush Truck Center locations in 14 states.
Rush had audited revenues of $1.2 billion for the year ending 2009 while Lake City International had unaudited revenues of $121.9 million. Rush Enterprises estimates that the purchase price for the assets of Lake City International will be approximately $76.5 million, including approximately $44 million for assets and goodwill and $34.5 million for real estate less a $2 million payment from affiliates of Lake City International for Rush assuming contingent liabilities of approximately $4.9 million. At closing, Rush Enterprises anticipates that it will finance approximately $28.5 million of the purchase price under its floor plan, accounts receivable and lease and rental truck financing arrangements.
The completion of the acquisition is subject to several conditions, including the approval by International Truck and Engine Corporation and IC Bus, both divisions of Navistar, Inc., Autocar LLC and Mitsubishi Fuso Truck of America, Inc.
W. M. “Rusty” Rush said, "The acquisition of Lake City International and the reorganization of the management of our Rush Truck Centers represent an important milestone for our company. The proposed acquisition will enable us to expand Rush’s geographic footprint further across the Western United States, providing significant entry into Utah and Idaho, and providing an opportunity to build the relationship we started with Navistar and its International brand when we acquired Rush International Truck Center – Charlotte in 2008.”
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