The ASV takeover will add a new product to Terex’s range of cranes, aerial work platforms and other construction plant. “ASV is a leader in compact track loader technology and with the global reach of Terex, we see tremendous opportunity for expanding ASV product sales,” said Ronald DeFeo, Terex chairman and chief executive officer.
He added, “The ASV acquisition is an excellent strategic and cultural fit and provides a great addition to our product offerings as Terex continues to grow as a global construction equipment manufacturer. From a financial perspective, we expect that ASV will add approximately $220m-$250mn in sales on a 2008 full-year basis and we are confident that this acquisition will enhance future earnings growth potential for Terex.”
Writing in Barron’s, Andrew Barry noted that Terex’s shares currently trade at only 8 times projected 2008 net earning per share (EPS). The paper compares this to fellow US crane manufacturer Manitowoc, which trades at around 12.5 times EPS. Barry disputes a pessimistic approach to the company by some on Wall Street, saying that the upward trend in the company’s profits would justify an $80 a share price by the end of the year, and that a takeover approach could push this valuation to as much as $100 a share.
