Specialty vehicle manufacturer Spartan Motors recently agreed to sell its emergency response segment to REV Group for $55 million.
The company said the final price is subject to a net working capital adjustment, and assumed certain liabilities of the ER segment. The transaction was unanimously improved by Spartan’s board of directors.
“The divestiture of the ER business unit will give us the speed and flexibility needed to further focus on accelerating growth and profitability in our commercial, fleet, delivery and specialty vehicles markets, where we see the biggest opportunity to generate higher returns,” said Daryl Adams, president and chief executive officer.
“By freeing up additional resources and capital to better serve our target markets and make additional strategic investments, we can continue to evolve to meet the needs of our customers and provide long-term value to our shareholders.”
The ER business unit generated revenue of approximately $253.3 million for the 12 months ending Sept 30, 2019, Spartan said. Proceeds from the sale, effective Feb 1, 2020, will be initially used to pay down debt and support working capital requirements.
As part of the transaction, REV also purchased the rights to the “Spartan” brand name. Accordingly, the company will be changing its corporate name in the coming months, subject to shareholder approval. REV then licensed the Spartan name and the Spartan diamond logo back to the company for use in its RV chassis business.
“The divestiture marks an important step in our business transformation,” Adams maintained. “E-commerce, electrification and autonomous technologies are driving dramatic change in the industry and this action positions us to continue to provide leading solutions for our customers. I appreciate the dedication of our ER associates over the past 45 years and I wish them success.”
Visit spartanmotors.com/transformation for more information.