Spartan Motors has acquired Utilimaster Corporation from John Hancock Life Insurance Company, a unit of Manulife Financial Corporation, in a $45 million deal

. Utilimaster develops specialty vehicles made to customer specifications in the delivery and service market, including walk-in vans and hi-cube vans, as well as truck bodies.

Charlotte, Mich-based Spartan expects the purchase to add about $105 million in revenue each year, while slightly diminishing earnings in the first full year. Utilimaster employs about 550 workers throughout its more than 550,000 square-foot manufacturing facility in Wakarusa, Ind.

"This acquisition represents a major strategic step forward to diversify our revenue stream into new end markets that offer growth potential and are not directly dependent on government funding or consumer spending," said John Sztykiel, president and CEO of Spartan Motors. "We also gain entry into the North American delivery and service market, add fabrication and vehicle body expertise, benefit from Utilimaster's strong brand, market share position and blue-chip customer base, and create opportunities to leverage future Spartan chassis growth."

The majority of Utilimaster's revenues are in the delivery and service market, which includes walk-in vans for the package delivery, bakery/snack delivery and linen/uniform rental markets. The rest of its revenues come from commercial truck bodies, along with service, parts and accessories.

"Utilimaster hit our targets for cultural fit, market potential and financial metrics, including sustained profitability and market share gains amidst an industry that has declined by 50 percent due to macro-economic conditions," said Joe Nowicki, Spartan's chief financial officer.

Under the terms of the deal, Spartan will pay $50 million in cash, less a net working capital adjustment. Spartan will also pay contingent earn-out payments of up to $7 million based primarily on the Utilimaster operation exceeding revenue milestones. The acquisition will be financed with a combination of cash and debt with an expected closing date for the transaction of Nov. 30, 2009, subject to the fulfillment of customary closing conditions.