Rush Enterprises Signs Definitive Agreement
15 July 1998
Rush Enterprises Signs Definitive Agreement to Acquire John Deere Dealership in Western Michigan
SAN ANTONIO, Texas--July 14, 1998--Acquisition Marks Second Construction Equipment Dealership in 10
Months with Combined Revenue of about $60 Million
Rush Enterprises Inc. , operator of the largest network of Peterbilt heavy-duty truck dealerships in North America and a John Deere construction equipment dealership in Houston, today announced that it has signed a definitve agreement to purchase the assets of Klooster Equipment Inc., a John Deere construction equipment dealership with four locations in Western Michigan.
The dealership will cover a territory of 54 counties, including the metropolitan areas of Grand Rapids and Lansing. Terms of the purchase were not disclosed. In 1997 Klooster Equipment had sales of approximately $21 million. The company anticipates the closing of the acquisition on or about Sept. 1, 1998, subject to the approval of John Deere and customary closing conditions.
W. Marvin Rush, chairman and chief executive officer of Rush Enterprises, stated: "This acquisition demonstrates our commitment and strategy with John Deere to take advantage of consolidation opportunities in the fragmented construction equipment industry. With two major acquisitions in the last 10 months, we are implementing a strategy which provides Rush Enterprises with new avenues for growth.
"Our experience with the John Deere dealership in Houston has reaffirmed our belief in the symmetry between the construction equipment business and the heavy-duty truck industry in both operations and customer base. From a financial standpoint, operating income as a percentage of sales is generally higher in the construction equipment industry.
"Moreover, we believe that by offering high quality service over a wide geographic area we will realize economies of scale and more favorable purchasing power," Rush noted.
Rush Enterprises operates the largest network of Peterbilt heavy-duty truck dealerships in North America and a John Deere construction equipment dealership in Houston. Its current operations include a network of dealerships located in Texas, California, Oklahoma, Louisiana and Colorado. These dealerships provide an integrated, one-stop source for the retail sale of new and used heavy-duty trucks and construction equipment; aftermarket parts, service and body shop facilities; and a wide array of financial services, including the financing of truck and equipment sales, insurance products and leasing and rentals.
Certain statements contained herein are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, those discussed in filings made by the company with the Securities and Exchange Commission.
This release is available on the KCSA Worldwide website at www.kcsa.com.