Addition of Smeal Product Portfolio and Key Operational Team Members Accelerates Spartan Motors’ Emergency Response Business Turnaround Plan; Transaction Accretive to Earnings in 2017
CHARLOTTE, Mich., Dec. 13, 2016 /PRNewswire/ — Spartan Motors, Inc. (NASDAQ: SPAR) (“Spartan” or the “Company”), a global leader in specialty chassis and vehicle design, manufacturing, and assembly, today announced its wholly-owned subsidiary, Spartan Motors USA, Inc., has entered into a definitive agreement to acquire Smeal Fire Apparatus Co. (“Smeal”), an industry-leading innovator and manufacturer of fire apparatus in North America, and its subsidiaries for $36.3 million, subject to certain net working capital adjustments, the Company’s forgiveness of certain liabilities owed by Smeal to the Company, and a subsequent tax gross-up payment, which is expected to be more than offset by tax benefits accruing to the Company. The acquisition will enable Spartan Motors to strengthen its Emergency Response business, gain scale and geographic reach in the industry, and accelerate its Emergency Response business unit turnaround plan. The transaction is expected to close in January 2017, subject to customary closing conditions.
Smeal is expected to generate 2016 revenues of approximately $100 million, which includes approximately $30 million of Spartan chassis sold to Smeal. The newly combined Spartan Emergency Response business unit will rank as one of the top-four North American fire apparatus manufacturers and will be well positioned, in an increasingly consolidating industry, to provide a robust and respected portfolio of leading products, services, and technologies. Today, Spartan’s Emergency Response business unit engineers and builds fire truck cabs and chassis for many of the industry’s leading original equipment manufacturers (OEMs), including Smeal, as well as designs and manufactures complete fire apparatus. The acquisition of Smeal is a logical next step in the longstanding relationship between the two companies, which spans more than 30 years.
“We look forward to adding Smeal’s industry-leading product portfolio and manufacturing expertise to Spartan’s, while expanding on a decades-long successful partnership,” said Daryl Adams, President and Chief Executive Officer of Spartan Motors. “We expect the acquisition to be accretive to earnings in 2017 and bring significant scale to our Emergency Response vehicle portfolio, which will help accelerate the turnaround of the Spartan Emergency Response business unit. It also expands the geographic reach of our dealers, benefits all of our customers by expanding our product offerings, and brings an additional portfolio of leading technology and expertise to the market.”
Adams continued, “We are pleased that Smeal chose Spartan Motors as their partner to carry on their brand’s legacy, as we take our supplier relationship to the next level. Spartan Motors is prepared to lead the consolidation charge in the fire apparatus market as strategic opportunities present themselves, and this acquisition represents a deliberate and strategic decision to accelerate the turnaround of Spartan’s Emergency Response business unit. Importantly, we also preserve a large, longstanding chassis customer relationship and protect the interests of their dealer channel, as we expand our dealer network across the U.S. and Canada and simultaneously accelerate our goal of becoming the leader in the fire apparatus market.”
Founded in 1955, Snyder, Neb.-based Smeal and its subsidiaries, U.S. Tanker Co. and Ladder Tower Co., are leaders and innovators in fire truck manufacturing and vehicle technology, offering a full line of aerial ladders and platforms (including Squrt®, TeleSqurt®, and Snorkel®), tractor-drawn aerials (TDAs), pumpers, stainless steel tankers and wildland urban interface vehicles (WUI). Today, Smeal operates facilities located in Snyder and Neligh, Neb.; Delavan, Wis.; and Ephrata, Pa.
“Spartan Motors is the perfect fit for Smeal, our customers, our employees, and our operational leadership team, as we combine with a proven ally and industry leader to help solidify our future and preserve the legacy of the Smeal organization,” said Rod Cerny, Smeal’s Chairman of the Board. “As part of a larger, profitable and well-capitalized public company, we will have the working capital necessary to ensure continued investment in product development and make sure the Smeal brand is able to deliver the exceptional products and service our dealers, departments, and municipality customers have come to expect.”
- The acquisition is a positive and compelling strategic fit for both companies and is an important step in securing the Company’s market leadership in an increasingly consolidating industry
- The acquisition is expected to be accretive to earnings for Spartan Motors in 2017 through a combination of operating efficiency efforts and synergies
- Smeal’s (including U.S. Tanker Co. and Ladder Tower Co.) notably superior aerial ladder, platform, and TDA product portfolio enhances and complements Spartan’s and brings industry-leading product technology to an important, high-performance product subset
- The combined Company will have 47 dealers in 44 states, 10 provinces and 3 territories, giving Spartan Emergency Response the ability to serve customers in the entire U.S. and all of Canada
- Smeal is expected to add approximately $70 million in annual revenue (excludes $30 million of Spartan chassis sold to Smeal) to the Company’s Emergency Response segment, and positions Spartan Emergency Response as one of the top-four fire apparatus manufacturers in the U.S. and Canada
- Smeal is expected to generate positive EBITDA in 2016
- The transaction will be initially financed with Spartan Motors’ recently amended $100 million line of credit
“We are proud of this significant milestone for Spartan’s Emergency Response business, and welcome Smeal’s knowledgeable and respected operational management team and employees to the Spartan Motors family,” concluded Daryl Adams. “This transaction will bring together some of the best talent in the industry and provides an opportunity for all employees to pursue a broader and more diverse career path.”
For more information regarding this transaction, please visit www.spartanmotors.com/smeal.
Posts Tagged Snorkel
Images from Steve Redick and Josh Boyajian from the 2-11 Alarm fire at 444 N. Lamon
More images can be found at KSC911.smugmug.com and Chciago 2-11 Alarm @ 4901 w Ferdinand – CHI-TOWN FIRE PHOTOS
Some quick images from Steve Redick and Tim Olk from the 2-11 Alarm fire today at 444 N Lamon Avenue in a church. More to follow later.
This from Steve Redick:
4046 Van Buren – Saturday..I took this one in because it was advertised as a fire in a building with a red ‘X’ … this was the first example I was able to see with the new safety marking system. It’s either a red square, a square with 1 slash, or a square with an X like this one, in the order of potential danger. Interior ops have to be assesed and approved before anyone can work inside. I believe this will be a very common site on the fireground. Also got a fair shot of one of the new buggies.
This from Dylan Konchan:
I got pictures from the Mabas 7 swap meet today in Peotone.
The Chicago Civil Defense Homepage posted this video recently about Chicago Fire Commissioner Robert J. Quinn and the introduction of the Snorkel to the fire service.
Part 2 of a commentary by Bill Post on the Chicago Fire Department history: Part 1 can be found HERE.
Mike, I too felt that it was ridiculous for the Chicago Fire Department to be running with a ‘Snorkel Squad 3’ for over 2 years without a Snorkel assigned to it. Only for the last few months before going out of service did they correctly re-designate Snorkel Squads 2 and 3 as Rescues 2 and 3. There was a reason for that however. The simple answer would be to say that it was recommended by a consultant study known as the Maatman Report. This was only partially true as ultimately the city didn’t want to spend the money that was necessary to keep fire companies in service and to provide adequate staffing.
The City of Chicago had hired a consultant who was the head of the Illinois Institute of Technology’s Fire Science program by the name of Gerald Maatman. He also headed the National Loss Control Service Corporation. The City of Chicago had first hired him in 1963 to do a comprehensive study of the Chicago Fire Department, which included the fire stations, their locations, and the distribution of Chicago’s fire companies. The study was done in part to help Chicago raise the AIA fire insurance rating to a Class 2, which it achieved the following year. For your information, the AIA now is known as ISO and was originally known as the National Board of Fire Underwriters. The 1963/64 Maatman study was really quite good. It recommended that many new fire stations be built and that fire companies from the center city be relocated to the outlying areas of the city that had poor fire station coverage.
While there were some companies that he did recommend be taken of service, there were also some companies that he recommended to be moved into the new fire stations. He didn’t recommend any manpower reductions on the companies, plus there were even a few select fire companies that he had recommended to have a 6th man added. The report recommended that 16 engines be taken out of service from a total of 120 engines that were still in service, and that three new truck companies be added to the 60 that were in service. No Snorkels, Snorkel Squads, or squad companies were recommended to be taken out of service. Five years later (in 1968) another Maatman Report was commissioned by the city, however this time the recommendations were quite a bit different from the first (1963) report.
First let me tell you what had changed. In 1967, the Chicago Fire Department had given firefighters an additional day off (in other words they agreed to further reduce their working hours). However, the city refused to hire more men or increase the number of firefighter positions to reflect the reduction in hours. By 1967, two of the squad companies had been out of service for a few years. Squad 12 was taken out of service in 1964 to create Truck 62. Squad 7 was taken out of service in 1965 to create Snorkel Squad 3. In December of 1966 and February of 1967, Squads 1 and 2 had become Salvage Squads 1 and 2. That really wasn’t a big change as both stayed at their same locations and even had the same apparatus. They were given more salvage covers and would respond citywide on 2-11s to do salvage work. In April of 1967, Squad 3 was involved in a serious accident and the apparatus was declared a total loss. Squad Company 3 was disbanded on April 17th. Squads 6 and 13 were taken out of service on June 16th, just three months after Squad 3 was disbanded. Squads 8 and 10 were downgraded (on the same day) to one-man companies who would only respond on Still and Box Alarms with their driver. Slightly over a month later, Squad 10 was taken out of service and Squad 5 became a one-man company.
By the end of the summer, only Salvage Squads 1 and 2, and Squads 4, 9, and 11 were fully-manned squads. In early 1968, all of the squads (with the exception of Salvage Squads 1 and 2, and Squads 4 and 9) were out of service. I’m not including Snorkel Squads 1, 2, and 3 that were still in service in 1968 even though SS3 was running without a Snorkel for over a year by then. Because of the reduced hours, the manpower situation was so bad that by 1968 one wouldn’t know from day to day if an engine or truck would be running with five men or only four. The unpredictable manpower situation was another reason why the city rehired Gerald Maatman to do another study.
This new study recommended that about 3/5ths of the engine and truck companies run with only four men assigned to them. It further recommended the creation of six Flying Manpower Squads with a crew of six firefighters each to respond to still alarms supplementing the four-man companies. The remaining engines and trucks, which were located downtown, near the lakefront, and in the busy areas of the city, were to run with five-man companies. These wouldn’t normally have a Flying Manpower Squad respond with them.
There was more to the 1968 Maatman Report. It recommended that all three Snorkel Squads be taken out of service and that only Salvage Squad 1 remain in service as the “downtown” squad company. He stated in his report that the special equipment that was carried on the Snorkel Squads could be carried on the new Flying Manpower Squads and the remaining Salvage Squad. He also had recommended that some of the equipment could be assigned to engines and trucks. He was right about that, as the fire department started equipping most of the engine companies with new multi-versals that previously were only carried on the Snorkel Squads.
The CFD also started assigning all trucks a K-12 rotary power. These saws previously were only carried on the Snorkel Squads. In the same report from 1968, the consultant recommended that one regular Snorkel Company (Snorkel 6) be taken out of service. Another recommendation was to move Snorkel 3 from Engine 84’s old house to Engine 60, which wasn’t a problem after Snorkel Squad 2 was taken out of service. Snorkel 2 was supposed to remain in service at Engine 28’s house, except they were to be given Snorkel Squad 1’s new Mack MB 55-foot Snorkel that had been delivered in 1967. Snorkel 4 was to be moved from Engine 25 (near the Loop) to Engine 67 (on the far west side) and Snorkel 7 was to be moved from Engine 55’s house to Engine Company 110. Snorkel 5 would remain at Engine 43’s house on the northwest side. The idea was to have the five remaining Snorkels located either in or near the high fire frequency areas. In those days (the late 1960s) the high fire frequency area on the south side really didn’t go much further south then 79th or 83rd Street, about as far east as Jeffrey (2000 East), and about as far west as Ashland (1600 west).
The consultant also recommended that ladder pipes be put on every truck company. There weren’t more then 25 ladder pipes in the field at the time. Having a ladder pipe on a truck allowed them to put an elevated stream into operation without having to wait for a Snorkel to arrive.
The Cicero Fire Department requested a Box Alarm in the overnight hours of Tuesday, July 31st. Steve Redick took in the fire and submitted images with the following information:
1800 S Cicero Ave..early am..Dollar StoreThis fire was held in check by sprinklers…high humidity kept the smoke conditions very low and as a result good photos were very difficult to get. I’m told a wall was breached in the large vacant commercial that made up sector 4 attached..I believe it was for inspection purposes..The division 10 MVU was requested but as fate would have it it was oos..
Thoughts from Bill Post about recent comments made regarding CFD spare apparatus for Tower Ladder 10 and Squad 1:
One of the great things about Tower Ladder 10’s location, is that they are not more than a mile and a half away from Fleet Management (the shops), so they could easily have work done on their rig whenever they wish. The oldest front line tower ladders though are three, 1996 HME/LTIs that are at Tower Ladders 21, 37, and 39, all of which are 16 years old. The CFD had been trying to replace most of their rigs within 10 to 15 years of frontline service. That said, Tower Ladder 21’s rig looks pretty good and it’s been getting it’s share of extra alarms lately. Tower ladders are listed on the city of Chicago’s official 2012 buying plan issued by the department of Procurement Services. This means that they intend to have bids requested to build them.
My concern is about the spare Snorkel that was running as Squad 1. That’s the only spare 55′ Snorkel left. I understand that it’s twin was gotten rid of over the last few years. Most readers of this site probably know by now that the CFD has been wanting to replace the three Snorkel Squads for the last few years, and that it has even been listed on Chicago’s official buying plan.
The catch, is that American LaFrance (ALF) holds the manufacturing rights to the Snorkel brand that they acquired from the old Snorkel corporation that went out of business (over 10 years ago), and ALF refuses to build any new Snorkels. The alternative is to rehab and remount an old Snorkel on a new chassis and body which several fire departments that still use Snorkels have done already. When there are fewer Snorkels out there, it becomes more difficult to even find Snorkels to rebuild and remount.
I have heard that there may be other manufacturers that would be willing to design their own aerial similar to a "Snorkel", however it would be very expensive. So, it would be much simpler if American LaFrance would just sell the rights to the Snorkel if not just build them again. Even though you see less of them in use, there are still a few major and several smaller fire departments that use Snorkels. The Memphis (TN) fire department had been running with two single-piece Snorkel Squads (which had been been using remounted Snorkels on newer chassis) and the Philadelphia (PA) fire department had been using two remounted full-size Snorkels. Since both Memphis and Chicago make extensive use of the smaller Snorkel Squads, it would be a good idea if they would start a class-action suit against American LaFrance to either manufacture the Snorkel or to at least let another company (who is willing to build the Snorkel) have the specs and rights to build them. The irony about this is that the Chicago Fire Department and our old repair shops is where the idea for the original Snorkel began, and our old repair shops even outfitted the original Snorkel for fire service applications. American LaFrance now owns the original Snorkel (which served as Snorkel 1 and Snorkel Squad 3) as part of their historic collection, even though they never actually built or outfitted the rig. The boom and platform were actually built by the Pitman Corporation. It really seems as if they are holding the fire service (in general) and Chicago Fire Department (in particular) hostage.
Dennis McGuire, Jr. tells us the following:
Riverdale has traded in their Pierce engines for twin E-Ones which went thru Fire Service. One of the Pierce engines (831) was sold to Joplin, Missouri. The other engine (830) was supposedly sold to a department downstate.Also the 1971 Snorkel from Oak Forest is no longer on the roster and is in the process of being sold to a business in Crestwood that has plans to rebuild it into a memorial truck.
The Toyne squad is supposed to be at Fire Service for a complete rebuild.