REV Group Merger with Terex Targets $75 Million Synergies and Industry Leadership
Strategic Merger Forms a New Specialty Equipment Powerhouse
REV Group and Terex Corporation have announced a definitive merger agreement, aiming to create one of the industry's most diversified specialty equipment manufacturers. The combination brings together two leaders in emergency, waste, utilities, environmental, and materials processing equipment—sectors known for stable demand and growth. With a reinforced U.S. manufacturing footprint, the merged company plans to leverage its scale and breadth to meet evolving domestic market needs.
$75 Million in Cost Synergies: A Key Driver of Future Value
One of the most notable aspects of this transaction is the targeted $75 million in run-rate synergies expected by 2028, with about 50% achieved within twelve months post-closing. These synergies are projected to result from complementary operations and integration of business functions, positioning the new entity to optimize costs and strengthen its competitive edge.
| Metric | Detail |
|---|---|
| Run-Rate Synergies | $75 Million by 2028 (50% in Year 1) |
| Pro Forma Net Sales | ~$7.8 Billion (2025 Estimate) |
| Combined Adjusted EBITDA Margin | ~11% (2025, before synergies); ~14% (excluding Aerials segment & including synergies) |
| Ownership Post-Merger | 58% Terex, 42% REV Group (fully diluted) |
| Implied Enterprise Value | ~$9 Billion |
| Cash Consideration to REV Shareholders | $8.71 per share ($425 Million Total) |
Reduced Cyclicality and Increased Financial Flexibility
The merger is engineered to decrease the combined company’s exposure to cyclical end markets. Terex plans to exit its Aerials segment—further enhancing resilience and predictability in earnings and free cash flow. The combined group’s efficient cost structure and attractive leverage profile (estimated net debt to adjusted EBITDA ratio of 2.5x at close) should enable ongoing investments in growth and profitability.
Leadership, Ownership, and Transaction Structure Support Growth Ambitions
Upon closing, Terex’s Simon Meester will become CEO of the merged company, supported by an integrated management team. Governance will be shared, with a 12-member board (seven from Terex, five from REV Group). The new entity will trade on the NYSE under TEX, and current shareholders of REV Group will receive 0.9809 shares of the new company and $8.71 in cash for each REV share held. The merger has unanimous board approval from both companies and is expected to close in the first half of 2026, subject to standard approvals.
What Does This Mean for Investors?
With an estimated $7.8 billion in net sales, double-digit EBITDA margins, and material synergy potential, the merger is designed for both stability and growth. Terex’s planned exit from the more cyclical Aerials segment and the pro forma balance sheet (estimated 2.5x leverage) further de-risk the platform, potentially offering shareholders more predictable performance through varied market cycles.
Key Takeaway: A Long-Term Play on Diversification and Efficiency
Investors interested in the specialty equipment sector will want to track progress on synergy realization, integration, and Terex’s Aerials exit process. This merger not only enhances the financial and operational strength of both parties but also marks a strategic bet on diversified, resilient market leadership with lower volatility and stronger free cash flow.
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