CHICAGO – Allied Products Corporation announced March 24 that it has signed a definitive agreement to sell its remaining 19.9 percent membership interest in Bush Hog L.L.C. to Bush Hog Investors L.L.C. and other purchasers arranged by Bush Hog Investors. Bush Hog L.L.C. is a maker of landscape, turf and agricultural equipment.
On March 7, Allied Products sold an 80.1 percent membership interest in Bush Hog, L.L.C., to Bush Hog Investors for $127 million, subject to post-closing adjustments. The sale price for the remaining interest totaled $31.4 million, less net Bush Hog balance sheet adjustments through the closing.
Bush Hog, L.L.C., based in Selma, Ala., consists of two businesses that formerly constituted the Agricultural Products Group of Allied Products. Those businesses are Selma-based Bush Hog, and Great Bend Manufacturing Company, based in Great Bend, Kan.
According to a release by Allied Products, the transaction is scheduled to close no later than June 30. At that time, Allied Products will use the proceeds of the sale to pay off an existing $18 million loan secured by its interest in Bush Hog, L.L.C. and plans to enter into a new working capital credit agreement.
Commenting on the planned transactions, Richard Drexler, chairman, president and CEO of Allied Products, stated, "The sale of our remaining interest in Bush Hog was a necessary step toward establishing a new credit facility that will meet the company’s working capital needs as we go forward. We currently are negotiating with Foothill Capital Corporation, a unit of Wells Fargo, to shape a credit facility that will give us the financing stability and flexibility we need for our metal-forming-equipment businesses."
Allied Products consists of the Verson division, which manufactures large metal forming presses; the Verson Standard Products Division, which produces small metal forming presses; Verson Pressentechnik GmbH, a joint venture based in Germany that markets stamping presses and related systems; and Precision Press Industries, which fabricates large welded components.
