Cervus Equipment operates 16 Peterbilt dealers in Canada. (Image: Servus)
Heavy equipment vendor Cervus Equipment, which has a large network of Peterbilt dealers in Canada, has agreed to acquire Brandt Tractor for C$302 million (US$240 million) in a deal that will take the company private.
The deal was announced Monday, with Alberta-based Brandt Tractor paying C$19.50 per share for Cervus (TSX:CRV), a 22% premium to Friday’s closing price. The deal will close in the fourth quarter if shareholders approve the sale at a special meeting in September.
“As a privately held company with a committed, well-capitalized, long-term owner, Cervus will be better positioned for the next stage of evolutionary growth for our agents,” Cervus CEO Angela Lekatsas said in a statement. “The size and scale of the entity created by combining the two companies will allow for increased investment in Cervus for the benefit of our employees and customers.”
Brandt Tractor is a major John Deere (NYSE:DE) dealer, with more than 50 locations. The company also has a smaller division that provides specialty trucking services, Brandt Truck Rigging & Trailers, based in Alberta.
“The Brandt team is excited about this transaction because it will allow us to better serve our customer base across Canada,” Brandt CEO Shawn Semple said in a statement.
Cervus has 16 Peterbilt dealers in Canada as part of a larger company focused on selling heavy equipment to the agriculture industry. Peterbilt supports the deal, Servos said.
Cervus’ Peterbilt dealers and service centers generated revenue of approximately C$91.5 million during the second quarter, 50% higher than last year. The company has benefited from the recovery of Canada’s trucking industry.
In a reflection of the high demand for new trucks, Cervus said in its second-quarter financial report that nearly all of its truck inventory has been allocated to customers. The company warned that shortages of semiconductors and other parts could hamper its ability to meet customer orders.
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