Photo: Wabash National

Photo: Wabash National

Trailer maker Wabash National Corp. will acquire truck body maker Supreme Industries, Inc., the two Indiana-based manufacturers announced late on August 8.  

The driving factor behind the buy was cited as the impact that the rising tide of e-commerce shipping business is having on the need for more “final mile” deliveries.

“Wabash National has been closely monitoring the transportation landscape as the growth of e-commerce has continued to change the logistics model,” said Dick Giromini, CEO of Wabash National, in a statement.

“We formally entered the final mile space in 2015 with the launch of our dry and refrigerated truck bodies, and we have been aggressively growing our presence and product offering over the past two years," he continued. "This acquisition supports these efforts and accelerates our objective to transform our business into a more diversified industrial manufacturer.”

“Combining with Wabash will enhance our ability to innovate more quickly and create more value for customers,” said Supreme Industries CEO Officer Mark Weber. “We found a cultural fit with Wabash National. Because of their commitment to safety, innovation and customer relationships, I’m confident joining the Wabash National family will benefit our employees, customers and distributors.”

The firms stated they have entered into a definitive agreement under which Wabash National would acquire all of the outstanding shares of Supreme in a cash tender offer for $21 per share, which represents an equity value of $364 million and an enterprise value of $342 million. 

Wabash National, launch in 1985 in Lafayette Ind., is among North America’s top producers of semi-trailers and liquid transportation systems. Its products include dry van and reefer trailers and truck bodies as well as platform and bulk tank trailers. Founded in 1974, Goshen, Ind.-based Supreme is one of the largest U.S. manufacturers of truck bodies, with 2016 sales of $299 million. It primarily produces light- and medium-duty truck bodies at seven facilities throughout the U.S.

The companies said the acquisition will combine Supreme’s extensive medium- and light-duty commercial vehicle portfolio, distribution network, and regional manufacturing locations with Wabash National’s advanced composite technologies, expertise in lean manufacturing and optimization, engineering and design proficiency, and strong supplier relationships.

It was also stated that “Supreme provides Wabash National with significant growth and diversification benefits, in line with the company’s long-term strategic plan, including reduced dependence on dry van trailer demand, reduced cyclicality and new segments for growth.”

Wabash National “intends to build upon Supreme’s industry leadership, distributed manufacturing and installed sales force capacity to accelerate its successful organic truck body growth initiative, while preserving Supreme’s heritage of excellence in serving customers.”

Giromini called the acquisition  “a great opportunity for both companies to combine our strengths to provide an enhanced customer experience within the growing final mile delivery space. With Supreme, not only can Wabash National accelerate organic growth with our innovative DuraPlate, honeycomb panel and molded structural composite truck bodies, we can also provide a broader conventional product offering to our existing customer base.”

Wabash National stated it expects to deliver at least $20 million in annual run-rate cost synergies by 2021. The expected cost synergies are primarily driven by corporate and procurement expenditures, and operational improvement savings. In addition, over time, Wabash National expects to “achieve significant incremental revenue opportunities that neither company could obtain on a standalone basis.”

Under the terms of the agreement and plan of merger, Wabash has formed an acquisition subsidiary, Redhawk Acquisition Corp., that will commence a tender offer to purchase all outstanding shares of Supreme for $21 per share. Following the completion of the tender offer, Wabash expects to consummate a merger of Redhawk Acquisition Corp. and Supreme in which shares of Supreme that have not been purchased in the tender offer will be converted into the right to receive the same cash price per share as paid in the tender offer. 

The tender offer and the merger are subject to customary closing conditions set forth in the merger agreement, including the acquisition by Redhawk Acquisition Corp. of a majority of Supreme’s outstanding shares at the time of the consummation of the tender offer and the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. 

The closing of the acquisition is expected to occur no later than the fourth quarter of 2017.

Related: The Big and Small of Last Mile Delivery

About the author
David Cullen

David Cullen

[Former] Business/Washington Contributing Editor

David Cullen comments on the positive and negative factors impacting trucking – from the latest government regulations and policy initiatives coming out of Washington DC to the array of business and societal pressures that also determine what truck-fleet managers must do to ensure their operations keep on driving ahead.

View Bio
0 Comments