Milwaukee-based Douglas Dynamics (NYSE:PLOW) is bulking up its snow control business.
The maker of Western, Fisher, and Blizzard-brand snowplows, sand and salt spreaders, and related accessories announced Monday that it has acquired "substantially all" assets of truck-mounted salt and sand spreader manufacturer TrynEx, which owns the SnowEx brand.
In a statement, Douglas CEO James L. Janik explained that the deal should "enhance our product portfolio and expand the breadth and depth of our capabilities in snow and ice control, while also exploring new growth channels across market adjacencies and expanding our reach to new geographies."
The company is paying $26 million for these benefits, receiving in return TrynEx's full line of SnowEx, TurfEx and SweepEx products, and a network of approximately 1,500 authorized dealers worldwide. Douglas notes that it also expects the deal to be accretive to earnings as early as next year and adds that TrynEx's business is free cash flow-positive -- as indeed, is Douglas's business. While Douglas reported "earning" less than $6 million last year, in fact the company generated more than $14 million in free cash flow itself -- and will now be growing that further with the TrynEx acquisition.
Douglas shares closed 1.4% in Monday trading, at $13.93, ahead of the news.
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends Douglas Dynamics. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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