Stellex Capital Management, a middle market private equity firm, announced that it has entered into an agreement to sell Morbark, a manufacturer of equipment and after-market parts for the forestry, recycling, tree care, sawmill, land clearing, and biomass markets to Alamo Group for $352 million. The sale includes all assets and operations of Morbark and its affiliate brands.
Founded in 1957 and based in Winn, Mich., Morbark and its affiliate brands, Rayco, Denis Cimaf, and Boxer Equipment, produce a full line of brush chippers, stump cutters, mini skid steers, forestry mulchers, aerial trimmers, whole tree and biomass chippers, flails, horizontal and tub grinders, sawmill equipment, material handling systems, and mulcher head attachments for excavators, backhoes, and skid steers.
"Together with Stellex, Morbark has achieved our strategic vision by greatly enhancing operations and implementing lean initiatives and best-in-class manufacturing practices that have resulted in new and improved redesigns, significant reductions in lead times, and improved delivery performance," said Dave Herr, chief executive officer of Morbark. "We are grateful for our time with Stellex and look forward to the next chapter as part of Alamo, an ideal suitor given its operating philosophy that will allow us to maintain our brands, operations, and successful momentum while further enhancing various operational synergies and accelerating international growth."
Since Stellex’s acquisition of Morbark in 2016, the Company has successfully completed two acquisitions to expand its product offerings and geographic presence. In October 2017, Morbark acquired Rayco Manufacturing, a Wooster, Ohio, based manufacturer of stump cutters, crawler trucks, forestry mulchers, multi-tool carriers, and aerial trimmers. In December 2018, Morbark acquired Denis Cimaf, a Roxton Falls, Quebec, based manufacturer of industrial brush cutters and mulcher heads. With these acquisitions and other strategic improvements, Morbark has increased its headcount by more than 200 employees and revenue has nearly doubled.
The acquisition, which is expected to close in the fourth quarter of 2019, is subject to a number of conditions, including the receipt of regulatory approvals and other pre-closing requirements. Upon completion of the transaction, Morbark will become part of Alamo’s Industrial Division. Herr will continue in his role as Morbark CEO, and Morbark’s day-to-day operations will remain unchanged.
"This moves provides numerous benefits for Morbark," Herr added. "Employees, customers, and dealers will notice no significant changes in their day-to-day work. Being part of a publicly traded company provides long-term stability so we can continue our investments in equipment and products to promote continued growth. All of our brands have an excellent reputation in the industry and will be maintained with no changes. We will have a significant opportunity to leverage Alamo’s international presence to expand our sales and sourcing capabilities."