Astec Industries, Inc. (Nasdaq: ASTE) today announced that it has entered into an agreement with John Deere Commercial Worksite Products, Inc. to acquire Deere's state-of-the-art 300,000 sq. ft. manufacturing facility located on 108 acres in Loudon, Tennessee. The transaction is expected to close in October 2002.
Headquartered in Chattanooga and founded in 1972, Astec has grown into a family of 16 companies with manufacturing operations in the United States, Canada and South Africa. The Astec family is the world's leading designer and manufacturer of specialized products for building and rebuilding the infrastructure.
The company's manufacturing operations are divided into four market segment groups: Aggregate & Mining; Asphalt; Mobile Asphalt Paving and Underground.
Astec's Underground Group through its Trencor, Inc. and American Augers, Inc. subsidiaries, designs and manufacturers trenchers, horizontal directional drills and auger boring machines for the utility construction industry. It is Astec's intention to move the Trencor operations and its original equipment manufacturing operations for Case Construction Equipment to the Deere's Loudon County facility.
Under an original equipment manufacture agreement, Astec's Underground Group will produce the current line of 8 Case trenchers, 3 horizontal directional drill models and horizontal directional drill fluid-mixing systems and related components. Astec will also dedicate selected models of Trencor trenchers and American Augers horizontal directional drills to be distributed through the Case dealer networks. It is Astec's intention to manufacture all of its Trencor and Case brand trenchers in the Loudon County facility, which will be the new headquarters of Trencor, Inc.
Relocation of the Case manufacturing operation to Loudon County is already underway with the initial phase of consolidation and integration being complete by December 31, 2002. Final integration of the whole Trencor operation into Loudon County is expected to be completed within the first quarter of 2003. At the end of the first phase of operational integration, Trencor expected to employ approximately 175 people at the Loudon facility, with employment growing to more than 250. Trencor, Inc. has been designing and manufacturing trenchers for more than 55 years and enjoys an outstanding reputation as a market leader.
Commenting on the announcement, Dr. J. Don Brock, Chairman and Chief Executive Officer of Astec, stated, "We are very excited about the new growth opportunities and anticipated long-term impact of our strategic alliance with Case and the relocation of our Trencor operations to Loudon County, Tennessee. We are acquiring a state-of-the-art facility and a pool of highly motivated and skilled men and women from which to staff the relocated operations. When the consolidation and relocation of these operations is complete, we will be manufacturing the world's broadest range of trenchers in our Loudon, Tennessee facility."