Stewart & Stevenson shareholders approved an $11.1 billion sale to Armor Holdings, Inc. at a special shareholder meeting, and the companies have closed the transaction.
Stewart & Stevenson, which makes a family of medium tactical vehicles (FMTV), was founded in 1902. Armor Holdings, which supplies armor to other truck makers, will begin production of its own vehicles.
"We are very pleased that our merger with Stewart & Stevenson has been completed and look forward to working with their talented team to quickly and smoothly integrate their operations into our Aerospace & Defense Group,” said Robert R. Schiller, President of Armor Holdings. “As a prime contractor for the U.S. military's tactical wheeled vehicle fleet, Stewart & Stevenson operations are highly complementary to Armor Holdings' existing armoring capabilities. This combination dramatically enhances our ability to offer the Department of Defense an integrated tactical vehicle resource and positions us extremely well to supply products for a wide range of high-priority projects in the coming years.
"In addition to the clear strategic benefits of this combination, there are significant financial benefits as well. We expect the acquisition to be accretive to earnings in 2007, based on current expectations for Stewart & Stevenson's FMTV program and modest cost synergies. We also believe this transaction will provide a wide variety of incremental growth opportunities for Armor Holdings and improve multi-year visibility for revenues. In short, we are excited to take the next step in Armor Holdings' evolution into a more diversified manufacturer of branded products for the military, law enforcement and personnel safety markets and look forward to leveraging this partnership to deliver significant value to customers and shareholders on a sustained basis."
Max L. Lukens, President and Chief Executive Officer of Stewart & Stevenson, said, "We are extremely pleased with the outcome of today's vote and appreciate the support of our shareholders throughout this process. We are glad to have been able to enhance value for our shareholders and deliver a significant cash premium to them with the Armor Holdings transaction. Joining the Armor Holdings family is the right fit for Stewart & Stevenson and we look forward to rapidly integrating our operations and capitalizing on the power of this combination."
The vote came after a Texas state court denied a temporary restraining order to postpone the special meeting. On May 12, Oshkosh Truck Corp. had filed a lawsuit claiming that Stewart & Stevenson had breached its fiduciary duty to shareholders, failing to run a full and fair auction. Oshkosh wanted a judge to throw out the standstill agreement that prevented Oshkosh from interfering in any Stewart & Stevenson deal until late 2007.