Mergers and Acquisitions

Joy Global to acquire LeTourneau Technologies; Marcus Investments to recapitalize Milwaukee Verlo franchise

Joy Global to acquire LeTourneau Technologies

Joy Global Inc., a Milwaukee-based mining equipment manufacturer, has entered into a definitive agreement to acquire LeTourneau Technologies Inc. from Rowan Companies Inc. for $1.1 billion in cash.

LeTourneau designs, builds and supports equipment for the mining and oil and gas drilling industries, and has been a leader in the earthmoving equipment industry since the 1920s.

The transaction has been approved by both companies’ boards of directors. Completion of the transaction is subject to the receipt of necessary regulatory approvals and other customary closing conditions and is expected to occur within 60 days.

LeTourneau operates two business segments – mining products and drilling products. The mining products business is the world’s leading manufacturer of large wheel loaders for surface mining, providing the industry’s largest model sizes and payload capacities. LeTourneau’s mining products business had calendar 2010 revenue and EBITDA of $259 million and $67 million, respectively.

LeTourneau’s drilling products business is a leading designer of offshore jack-up drilling rigs as well as a manufacturer of the primary components for these rigs.

"This acquisition represents a compelling opportunity for Joy Global Inc. and our shareholders, with strong growth prospects for both the mining products and drilling products business segments," said Joy Global chief executive officer Mike Sutherlin. "The LeTourneau mining products business is a natural fit with our P&H business. It adds another solution for surface loading that complements our electric mining shovels, and gives us access to smaller and non-electrified mines. The drilling products business moves us into another area of resource extraction that has similar fundamentals and value drivers as surface and underground mining, and therefore is a good fit for our business model which focuses on equipment reliability and Life Cycle Management. Oil and gas has been defined as a strategic growth opportunity for a number of years, and LeTourneau gives us a great entry point into this sector. We welcome the LeTourneau team to Joy Global Inc. and look forward to working together to pursue the growth opportunities that come with the combined business."

Randy Baker, president and chief operating officer of P&H Mining Equipment, said, "The addition of LeTourneau’s front-end loaders will enhance our product offering and leverage our existing manufacturing and product distribution networks. We expect a smooth integration since P&H already serves as a dealer for LeTourneau in key geographies around the world.”

Marcus Investments to recapitalize Milwaukee Verlo franchise

Marcus Investments LLC, an investment firm formed by the Marcus family of Milwaukee, is seeking to recapitalize the Milwaukee Verlo Mattress franchise as part of a Chapter 128 receivership.

The Milwaukee franchise includes six Verlo Mattress Factory Stores operated by Greg Gardetto and Mike Murphy.

“Verlo Mattress Factory Stores is one of the best custom-bed brands in the United States. The company’s system for delivering made-to-order custom top-quality mattress sets and sleep-related products at competitive prices has earned it a tremendous following among consumers. We see the Milwaukee Verlo Mattress stores as an excellent opportunity for Marcus Investments to leverage our business and franchising experience into increased sales and profitability for the stores,” said Chris Nolte, vice president of Marcus Investments.

Nolte said the Milwaukee-area franchise has suffered from the impact of the Great Recession on consumer spending but has a solid base business that, if properly capitalized, would provide a solid foundation for future growth.

“We’ve been talking with Greg and Mike for several months about improving the

financial position of the franchise and successfully growing the business. Over the past 24 years, the Milwaukee franchise has produced tens of thousands of custom mattresses for customers throughout the area. We like the brand’s high quality products, solid reputation and loyal customer base. Verlo is a good fit with our existing business,” Nolte said.

The Milwaukee Verlo Mattress Factory Stores are located at: 13735 W. Capitol Drive in Brookfield; 5530 N. Port Washington Road in Glendale; 6501 W. Layton Ave. in Greenfield; 11300 75th St. in Kenosha; W176 N9348 Rivercrest Drive in Menomonee Falls; and 2510 S. Green Bay Road in Racine.

The Marcus Investments recapitalization process will be conducted through a company subsidiary.   

Marcus Investments seeks to acquire, steward and grow the legacies of successful entrepreneurs and families.  The company creates long-term returns for its investments through patient capital, valuable relationships and solid operating experiences.  Marcus Investments focuses on long-term value creation in businesses with strong operating partners.

 

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