Terex Corporation has entered a definitive agreement to acquire Environmental Solutions Group (ESG) from Dover Corporation for2 billion in cash. 1.725 billion after accounting for $275 million in expected tax benefits, represents 8.4x ESG’s projected 2024 EBITDA including synergies. The deal will establish Terex as a leader in refuse collection vehicles and waste compaction equipment through ESG’s renowned brands including Heil and Marathon.
Strengthening Market Position
The acquisition brings complementary capabilities to Terex’s portfolio, combining ESG’s industry-leading waste management solutions with Terex’s existing utilities business to create a new Environmental Solutions segment. This segment is projected to generate 40 billion addressable market.
Financial and Operational Benefits
Terex anticipates the transaction will be immediately accretive, projecting double-digit adjusted EPS growth in 2025 and $25 million in synergies by 2026 through procurement optimization and supply chain efficiencies. The company expects ESG’s operations to contribute 130 basis points of margin improvement while maintaining a conservative leverage profile, with net debt-to-EBITDA projected at 2.2x at closing and below 2.0x by 2025.
“ESG represents exactly the type of business we want in our portfolio – market-leading, non-cyclical, and synergistic with our existing operations,” said Terex CEO Simon Meester. The acquisition aligns with Terex’s multi-year transformation strategy, particularly in growing sectors like electrification and circular economy solutions.
Closing and Integration Plans
Pending regulatory approvals, the transaction is expected to close in late 2024. UBS Investment Bank provided financing for the deal, which will be funded through cash reserves and debt. Terex plans to retain ESG’s management team, including President Patrick Carroll, who previously led Terex Utilities. The integration will focus on leveraging ESG’s digital solutions like 3rd Eye tracking systems across Terex’s broader customer base while maintaining ESG’s strong brand identity in the waste industry.
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