Spartan Motors announced the sale of its Emergency Response (ER) segment to REV Group (REVG), which paid approximately $55 million in cash
“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,” says President and CEO Daryl Adams.
“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,” Adams adds.
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 the company’s RV chassis business, according to the announcement.
“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,” Adams says.
The sale, which was unanimously approved by the company’s board of directors, is subject to a net working capital adjustment and assumed certain liabilities of the ER segment.
