Oshkosh plans $3.5 billion credit facility for JLG purchase

By Sara Rosenberg

New York, Oct. 16 - Oshkosh Truck Corp. is planning on getting a new $3.5 billion senior credit facility to fund its acquisition of JLG Industries, Inc., company officials said in a conference call Monday.

Bank of America and JPMorgan are the lead banks on the deal.

The facility consists of a $3 billion in term loans and a $500 million revolver.

Oshkosh is anticipating a weighted average interest rate of 7.7% on the new debt, with just under $3.3 billion to be funded at close, officials said in the call.

The company expects to pay down $300 million or more annually by fiscal 2008, bringing the debt to EBITDA ratio down to around 3 times by Sept. 30, 2008 from the upper-4s at closing of this transaction, officials added.

Under the agreement, Oshkosh will acquire all outstanding shares of JLG for $28.00 per share. Total consideration, including transaction costs and assumed debt, is $3.2 billion in cash on a fully diluted basis.

The transaction is expected to close in early December, subject to customary closing conditions, including approval under Hart-Scott-Rodino and similar laws outside the United States and the approval by the shareholders of JLG.

Oshkosh Truck is an Oshkosh, Wis., designer, manufacturer and marketer of specialty commercial, fire and emergency and military vehicles and bodies. JLG is a McConnellsburg, Pa., manufacturer of access equipment, including aerial work platforms and telehandlers.

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