Oshkosh Truck (NYSE:OSK) revealed today that it has agreed to buy JLG Industries (NYSE:JLG) for $3.2 billion in cash. While any large acquisition involves a certain degree of risk, there is a lot to like about this deal from a strategic standpoint.

Oshkosh, a manufacturer of specialty trucks for commercial, firefighting, and military use, will pay $28 per share for JLG, a maker of aerial work platforms and telehandlers. The price tag, which represents a 35% premium to the closing price of JLG's stock on Friday, doesn't seem terribly steep, as JLG's top line grew by 32% in fiscal 2006 and is expected to increase by 20% to 25% in fiscal 2007.

But even beyond latching on to JLG's growth, Oshkosh will also achieve some welcome diversification in its revenue stream via the purchase. As Motley Fool contributor Stephen Simpson has written, Oshkosh itself has seen solid top-line growth recently, but the company has been leaning heavily on its defense business to achieve this performance. As time goes on and talk of U.S. withdrawal from Iraq continues, this business looks increasingly vulnerable to a slowdown. Though JLG also has a military business, non-defense sales appear to be the major driver of its growth.

In addition, JLG will help broaden the geographic basis of Oshkosh's business. For the first nine months of this year, 12.6% of Oshkosh's revenue came from outside of North America. By contrast, 25% of JLG's $2.3 billion in fiscal 2006 revenue came from Europe and other parts of the world outside North America.

Finally, now might be a good time for consolidation in the specialty heavy equipment area. Shares of both Oshkosh and JLG are down from recent highs in April and May as evidence mounts that the U.S. economy is cooling down. JLG's business lines should help Oshkosh better weather the slowdown.

Oshkosh was a quality name before this deal, but the addition of JLG will likely add some welcome horsepower.

For related content, check out these stories:

Want investing advice for the long haul? Try any of the Fool's newsletters free for 30 days.

Fool contributor Brian Gorman does not own shares in any of the companies mentioned. The Fool's disclosure policy keeps on truckin'.