Terex Corporation has successfully completed the acquisition of Environmental Solutions Group (ESG) from Dover Corporation for a purchase price of $2.0 billion, with a net cost of $1.725 billion after expected tax benefits.
The acquisition is expected to reduce cyclicality, deliver financial accretion, and lower capital intensity. It is also expected to unlock approximately $25 million of cost and revenue synergies by 2026.
With the addition of ESG, Terex will now derive 67% of its total revenue from North America, up from 61% based on trailing 12 months results ended Q2 2024.
ESG has demonstrated a consistent, resilient growth with a 7%+ long-term organic revenue compound annual growth rate (CAGR) over the past 10 years. It holds the number one position in North America in refuse collection vehicles, waste compaction equipment, and associated parts and digital solutions.
Terex anticipates that ESG will drive increased revenue growth, free cash flow, earnings before interest, taxes, depreciation, and amortization (EBITDA) margin, and EPS accretion. The transaction is expected to be double-digit percentage adjusted EPS accretive in 2025, with meaningful growth thereafter.
The acquisition is valued at approximately 8.4x 2024E earnings before interest, taxes, depreciation, and amortization (EBITDA) including expected run-rate synergies.
Patrick Carroll, the president of ESG for the past 14 years, will continue in that role. Terex also expects approximately $25 million of identified synergies to be achieved by the end of 2026.
Terex Corporation is a global industrial equipment manufacturer of materials processing machinery, waste and recycling solutions, mobile elevating work platforms (MEWPs), and equipment for the electric utility industry. The market has reacted to these announcements by moving the company's shares 0.5% to a price of $53.29. If you want to know more, read the company's complete 8-K report here.
