Spartan Motors has sold its emergency response (ER) segment to REV Group for about $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 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.”
The ER business unit had revenue of about $253.3 million for the 12 months ended Sept. 30, 2019. Proceeds from the sale, effective Feb. 1, will be initially used to pay down debt and support working capital requirements. As part of the transaction, REV Group purchased the rights to the “Spartan” brand name.
“We are excited to acquire a top North American fire apparatus manufacturer of scale with a well-recognized, innovative and broad product offering, long-standing relationships with dealers and municipal customers, and a growing installed base of over 6,000 vehicles,” said Tim Sullivan, president and CEO of REV Group. “It’s our long-term strategy to continue to grow this segment, as well as continue to establish REV Group as a leader in the innovation of fire apparatus and other emergency response vehicles.”