Lund International Completes Smittybilt Acquisition
29 January 1999
Lund International Completes Smittybilt Acquisition
ANOKA, Minn.--Jan 29, 1999--Harvest Partners' Affiliate Reinforces Leading Position In Truck Accessories Market With Completion of Second Acquisition in Two Month
Period
Lund International Holdings, Inc. , a leading manufacturer of accessories for trucks, announced today that it has completed its previously announced acquisition of 100% of the capital stock of Smittybilt, Inc. for $18 million in cash.
Smittybilt, based in Corona, CA, is a leading manufacturer of tubular accessory products for light trucks, including tubular steps, brush guards, bumpers and nerf bars. Smittybilt is Lund International's second recent acquisition and will enable Lund International to expand into the truck accessories market with a broader range of products. In December 1998, Lund International completed the $66 million acquisition of Auto Ventshade Company, a leading manufacturer and supplier of accessories for light trucks with an outstanding performance record for all aspects of customer service. The additions of Auto Ventshade and Smittybilt significantly reinforce Lund International's leadership position in the highly fragmented light truck accessories market.
Lund International is an affiliate of Harvest Partners, Inc., a leading New York private investment firm. Funds under the management of Harvest Partners own 49.9% of Lund International's voting common shares and approximately 62.3% of its equity. In addition, Harvest spearheaded Lund International's $90 million acquisition of Deflecta-Shield in March 1998.
As part of the acquisitions of Auto Ventshade and Smittybilt, Harvest Partners, BancBoston Capital, Liberty Mutual Insurance Company and affiliates of Massachusetts Mutual Life Insurance Company have invested $30 million in additional equity in Lund International through a private placement. Lund International has also expanded its existing senior bank credit facility led by Heller Financial, Inc., to provide financing of approximately $106 million. Affiliates of Massachusetts Mutual Life Insurance Company and National City Venture Corporation provided $25 million in the form of subordinated debt and warrants.
"The combined acquisitions of Auto Ventshade, with its outstanding reputation for all aspects of customer service, and Smittybilt with a complementary product line, will position Lund International as the clear market leader for truck accessories and allow us to better serve our customers," said Dennis Vollmershausen, president and CEO of Lund International. "At the same time, expanding our existing credit facility and the additional equity investments will enable us to continue seeking additional acquisitions in this fast growing industry."
"In the past six months, Lund International has made strides towards improving overall performance and achieving its goal to be a powerhouse in the highly fragmented light truck industry," said Ira Kleinman, chairman of Lund International Holdings and a general partner of Harvest Partners. "In September 1998, we appointed Dennis Vollmershausen as President and CEO, fortifying our management team. Under his leadership we are taking the necessary actions to implement a successful plan to return the Company to profitability. In addition, we have now completed these two recent acquisitions that demonstrate our ability to execute Harvest's consolidation strategy and continue building upon Lund International's platform for future growth."
Smittybilt, Inc., located in Corona, CA, is a leading manufacturer of tubular accessory products for the light truck market.
Based in Anoka, MN, Lund International Holdings is a leading designer, manufacturer and marketer of a broad line of accessories for new and used trucks. It is also a leading manufacturer of aftermarket and original equipment accessories for the heavy truck market.
Harvest Partners, Inc. is a private investment firm which focuses on management buyouts and growth financing of medium-sized specialty services, manufacturing and distribution businesses. Founded in 1981, Harvest Partners is best known for its expertise in structuring multinational management buyouts and for its successful platform acquisitions. Harvest Partners currently has approximately $600 million in capital under management from leading U.S. and multinational institutions, including DBAG (the private equity partner of Deutsche Bank), Asea Brown Boveri, Volvo, banks, insurance companies, and public and private pension funds.
One of Harvest's most successful platform investments was the $49 million management buyout it sponsored of Career Horizons, Inc. in 1990. Harvest realized a gain of approximately 11 times its invested capital in 1996 when AccuStaff acquired Career Horizons in a transaction valued at over $900 million.
Statements in this press release relating to future financial results, ongoing company operations, the effects of the acquisition, trends and market analysis, among others, are forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties which could cause results to differ materially from those anticipated. Among the factors that could cause anticipated results of the acquisition to differ materially are the following: inability to obtain expected efficiencies, or to obtain them in a timely manner; inability to effectively manage a larger enterprise, to integrate the two companies, or to control costs associated with such integration. In addition, both Lund's business and Smittybilt's business and operations (and anticipated results) include the following risk factors: consumer preference changes, risk of expansion into new distribution channels, delays in designing, developing, testing or shipping of products, increased competition, general economic developments and trends, developments and trends in the light truck and automotive accessory market and increased costs. This is not an exhaustive list and the Company may supplement this list in future filings or releases or in connection with the making of forward-looking statements.