Wisconsin Manufacturing News

Generac stock makes debut on New York Stock Exchange; Oshkosh Corp. wins more military work; Grede lands $60 million revolving credit agreement

Generac stock makes debut on New York Stock Exchange

Generac Holdings Inc., the Waukesha-based parent company of Generac Power Systems Inc., made its debut as a publicly traded company on the New York Stock Exchange Thursday under the ticker symbol GNRC.

"This is a great achievement for Generac and we are extremely pleased by the success of our initial public offering," said Aaron Jagdfeld, chief executive officer of Generac. "We are excited about the future of Generac as a publicly traded company."

Shares of Generac debuted at $13 per share and were at $13.41 when the stock market closed on Friday.

Generac sold about 18.75 million shares of stock in its IPO. The company previously said it plans to use the proceeds from the offering to pay down debt.

Generac is owned by CCMP Capital Advisors LP, a New York-based private equity firm.

J.P. Morgan Securities Inc., Goldman, Sachs & Co., BofA Merrill Lynch and Robert W. Baird & Co. Inc. are the book running managers for the offering. William Blair & Company, KeyBanc Capital Markets and Stephens Inc. are the co-managers for the offering.

Oshkosh Corp. wins more military work

Oshkosh Corp. has won two additional contracts from the U.S. Marine Corps and U.S. Army.

Its new Marine Corps contract, valued at more than $156 million, is to construct more than 400 Logistics Vehicle System Replacements (LVSR).

The order brings the total number of LVSRs under contract to nearly 1,300. With the latest order, LVSR production and delivery is extended into July 2011.

"The Oshkosh LVSR is among the world’s most advanced logistics platforms and offers the U.S. Marine Corps a technologically sophisticated, heavy-payload vehicle to answer the call in even the most arduous conditions," said Andy Hove, Oshkosh Corp. executive vice president and president of the company’s Defense Division. "The vehicle’s off-road capabilities only make it more versatile when transporting heavy equipment, fuel and other supplies to the front line."

The new Army contract, valued at more than $84 million, is to supply more than 625 add-on armor kits for the MRAP All Terrain Vehicle (M-ATV).

Under the delivery order, Oshkosh will provide explosively formed penetrator (EFP) protection kits for the M-ATV. Delivery of the kits is expected to begin in April 2010 and be completed by the end of August 2010. The Oshkosh-supplied kits will include EFP armor, base door armor and a door-assist mechanism.

To date, Oshkosh has received awards valued at more than $4 billion to deliver 6,619 M-ATVs, as well as spare parts kits and aftermarket in-theater support.

Grede lands $60 million revolving credit agreement

Grede Holdings LLC has entered into a new revolving credit and security agreement with Bank of America as a lender and as agent for the lenders.

Wells Fargo Capital Finance, part of Wells Fargo & Company, is a co-lender on the transaction.

The new Revolving Credit Agreement provides up to $60 million to support the company’s working capital needs and other general corporate purposes. It is secured by accounts receivables and inventory of the company and has a term of three years, expiring in February 2013.

“Given the restrictive credit markets of today, the new financing agreement validates Grede’s actions as further evidence of the company’s future vitality,” said Lou Lavorata, chief financial officer (CFO) of Grede. “Through our rigorous turnaround activities, we have brought together two well-positioned companies that have outstanding synergies, a strong balance sheet, low debt, and excellent support from our bank partners.”

Grede Holdings LLC was formed recently through the combination of the assets of the former Milwaukee-based Grede Foundries Inc. with Citation Corp. Grede Foundries had filed for Chapter 11 bankruptcy reorganization.

The transactions included the purchase of substantially all of the assets of Grede Foundries by Grede LLC, an entity controlled by a private investment fund managed by Wayzata Investment Partners LLC. The transactions also were facilitated by additional equity investment from Wayzata and Citation’s largest shareholder, GSC Group. The new company is controlled by Wayzata and led by Doug Grimm, who is chairman, president and chief executive officer.

The new Grede is headquartered in Novi, Mich.

“The combination of Citation and Grede creates, what we believe is, the most diversified foundry company in North America with one of the strongest balance sheets in the industry,” Grimm said. “We expect revenue to reach $600 million in 2010 through our combined business in the automotive, industrial and heavy truck markets. The significant equity investment from Wayzata and GSC has reduced total funded debt of the two companies by 80 percent, or $110 million.”

The new Grede has 2,700 employees, 14 foundries and two machining facilities with nearly 600,000 tons of iron casting capacity.

Employees at the former Grede headquarters in Milwaukee will likely relocate to the Novi, Mich. and Menomonee Falls facilities later this year.


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