Spartan Sells Emergency Response Unit, Adjusts Focus
Spartan Motors Inc. announced the sale of its Emergency Response segment to REV Group Inc. The sale is intended to help Spartan focus on its commercial, fleet, delivery, and specialty vehicles markets.
The divestiture of the ER business unit will give Spartan the speed and flexibility needed to further focus on accelerating growth and profitability in the commercial, fleet, delivery, and specialty vehicles markets.
Photo: Spartan Motors
Spartan Motors Inc., a North American provider of specialty vehicles for the commercial and retail vehicle industries (including last-mile delivery, specialty service, and vocation-specific upfit segments), as well as for the recreational vehicle markets, announced the sale of its Emergency Response segment to REV Group Inc.
"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 CEO. "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."
Spartan has announced the sale of its Emergency Response segment to REV Group, Inc.
Photo: Spartan Motors
REV Group paid approximately $55 million in cash at closing, which is subject to a net working capital adjustment, and assumed certain liabilities of the ER segment. The transaction has been unanimously approved by the company's board of directors.
The ER business unit had revenue of approximately $253.3 million for the 12 months ended Sept. 30, 2019. 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, REVG 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. REVG has 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. 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," concluded Adams.
Check out a short video with Adams discussing the transformation of Spartan Motors below:
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