Rush Enterprises Announces Preliminary Agreements to Acquire 2 Companies
23 July 1999
Rush Enterprises Announces Preliminary Agreements to Acquire Southwest Peterbilt Inc. and Norm Pressley's Truck Center
SAN ANTONIO--July 22, 1999--Rush Enterprises Inc. , which operates the largest network of Peterbilt heavy-duty truck dealerships in North America as well as John Deere construction equipment dealerships in Texas and Western Michigan, today announced that it has signed letters of intent to purchase the assets of Southwest Peterbilt Inc. (Southwest) and Norm Pressley's Truck Center (Pressley), both Peterbilt truck dealers.The pending acquisitions will provide Rush with the exclusive rights to sell Peterbilt trucks and parts from eight new locations encompassing most of Arizona, New Mexico and the southern region of California, including the cities of Phoenix, Tucson, Flagstaff, Albuquerque and San Diego. Rush currently operates 24 truck locations in 5 states.
Rush has a high regard for the management and the employees of Southwest and Pressley and looks forward to working with the teams at both companies. Rush intends to operate the acquired companies as full-service Peterbilt franchises, and will begin to integrate their operations into the Rush Truck Center system upon completion of the transactions. Rush had revenues of $612.8 million during 1998 while Southwest and Pressley had combined revenues of approximately $115.0 million for the same period.
Rush anticipates the purchase price for Southwest will be approximately $9.5 million for the net book value of acquired assets, plus $17.0 million in goodwill. An additional $4.0 million may be paid based on a performance-based objective. Southwest recorded unaudited pretax earnings of $2.4 million for the six-month period ended June 30, 1999.
Rush anticipates the purchase price for Pressley will be approximately $2.5 million for the net book value of acquired assets plus $2.9 million in goodwill. An additional $700,000 may be paid based on a performance-based objective. Pressley recorded unaudited pretax earnings of $786,000 for the six-month period ended June 30, 1999. The transactions will be financed with a combination of the Company's stock, notes payable and cash.
In announcing the agreements, W. Marvin Rush, chairman and chief executive officer of Rush Enterprises Inc., stated, "The acquisitions of these franchises will complement the largest full-service truck dealership network in the country. Covering large sections of Texas, California, Oklahoma, Louisiana, Colorado, New Mexico and Arizona, Rush Truck Centers will have 32 locations offering seamless service, consistent pricing and 24-hour dependability across the entire southwest region as well as 80% of the U.S.-Mexico border crossings. With the continued booming growth throughout the southwest coupled with the successful growth of NAFTA-related businesses, these will be the most important acquisitions for Rush to date."
Mr. Rush added, "We look forward to joining forces with two very well run organizations and offering our consistently high-quality products and services over a much larger service territory."
Rush Enterprises operates the largest network of Peterbilt heavy-duty truck dealerships in North America and John Deere construction equipment dealerships in Texas and Michigan. Its current operations include a network of dealerships located in Texas, California, Oklahoma, Louisiana, Colorado and Michigan. 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. The Company also operates a retail farm and ranch superstore that serves the greater San Antonio, Texas, area.
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.