Heavy equipment seller Cervus Equipment, which owns a large Peterbilt dealer network in Canada, has agreed to be acquired by Brandt Tractor for CA$302 million ($240 million) in a deal that will take the company private.
The deal, announced Monday, has Alberta-based Brandt Tractor paying CA$19.50 per share for Cervus (TSX:CRV), a 22% premium over Friday’s closing price. The transaction would close in the fourth quarter if shareholders approve the sale at a special meeting in September.
“As a private company with a committed, well-capitalized and long-term owner, Cervus will be better positioned for the next stage of evolutionary growth for our dealerships,” Cervus CEO Angela Lekatsas said in a statement. “The size and scale of the entity created by the combination of our two companies will allow for increased investment into Cervus for the benefit of our employees and customers.”
Brandt Tractor is a major John Deere (NYSE:DE) dealer, with over 50 locations. The company also has a smaller division catering to specialized trucking, Brandt Truck Rigging & Trailers, based in Alberta.
“The Brandt team is excited about this deal as it will allow us to better serve our customer base across Canada,” Brandt CEO Shaun Semple said in a statement.
Cervus owns 16 Peterbilt dealerships in Canada as part of a larger business focused on selling heavy equipment for the agriculture sector. Peterbilt is supporting the deal, Cervus said.
Cervus’ Peterbilt dealers and service centers generated nearly CA$91.5 million revenue during the second quarter, more than 50% higher compared to a year ago. The company has benefitted from a rebound in Canada’s trucking industry.
Reflecting the high demand for new trucks, Cervus said in its second-quarter financial report that nearly all of its trucking inventory had been committed to customers. The company warned that shortages in semiconductors and other parts could hinder its ability to meet customers’ demands.
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