425: Terex and REV Group Announce Strategic Merger

Sentiment:

Merger Announcement 30 October 2025 8:18 AM

Terex Corporation and REV Group, Inc. have entered into a definitive merger agreement to combine in a stock and cash transaction, creating a leading specialty equipment manufacturer with significant value-creating synergies.

Delay expectedThe merger is subject to required regulatory clearance, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act).The Initial Termination Date for the merger is April 29, 2026, but can be automatically extended to July 29, 2026, and then to October 29, 2026, if regulatory waiting periods have not expired or required regulatory approvals have not been received.

Capital raiseThe merger consideration includes a cash component of $8.71 per REV Group share, totaling $425 million.Terex may seek debt financing for all or a portion of this cash consideration, including through an amendment of the Tag Credit Facility.The debt financing would also be used to repay or refinance existing indebtedness of REV Group and its subsidiaries.

Better than expectedThe merger is expected to create a large-scale, diversified industrial leader with enhanced scale and growth profile.The transaction is projected to unlock significant value-creating synergies of $75 million run-rate value by 2028.The combined company is expected to operate from a position of enhanced financial strength, characterized by low capital intensity, an attractive leverage position, and significant free cash flow.The pro forma Adjusted EBITDA margin is estimated to be 14% for 2025 (excluding Aerials and including synergies), which is an improvement over the current combined 11% (excluding synergies).

Summary

Terex Corporation (Terex) and REV Group, Inc. (REV Group) have entered into a definitive merger agreement to combine in a stock and cash transaction.
REV Group shareholders will receive 0.9809 shares of Terex common stock and $8.71 in cash for each REV Group share, totaling $425 million in cash consideration.
Upon closing, Terex shareholders will own approximately 58%, while REV Group shareholders will own approximately 42% of the combined company's fully diluted shares on a pro forma basis.
The combined company is expected to have approximately $7.8 billion in net sales and an attractive combined Adjusted EBITDA margin of approximately 11% as of year-end 2025, excluding synergies.
The transaction is projected to unlock significant value-creating synergies totaling $75 million of run-rate value by 2028, with approximately 50% achieved within 12 months after closing.
Terex also announced its intention to initiate a process to exit its Aerials segment, including the assessment of a potential sale or spin-off.
Excluding Terex's Aerials segment and including $75 million of synergies, the pro forma Adjusted EBITDA margin for 2025 is estimated at approximately 14%.
At closing, the combined company is estimated to have a net debt to trailing twelve-month pro forma Adjusted EBITDA ratio of approximately 2.5x, including run-rate synergies.
Approximately $1 billion of liquidity is expected at closing, with a combined equity value of ~$7 billion and enterprise value of ~$9 billion at announcement.

Sentiment

Score: 8

Explanation: The filing announces a strategic merger with significant anticipated synergies, enhanced market position, and improved financial metrics, indicating a strong positive outlook for the combined entity. Management comments are highly optimistic about value creation and growth.

Positives

Creates a scaled specialty equipment manufacturer with complementary, leading brands in attractive, low cyclical, highly resilient, and growing end markets.
The combined organization will have a substantial U.S. manufacturing footprint, well-positioned to benefit from domestic demand growth.
Unlocks significant value-creating synergies totaling $75 million of run-rate value by 2028, with approximately 50% achieved within 12 months after closing.
Both Terex and REV Group have demonstrated their ability to successfully execute large integrations and deliver expected synergy value.
Terex's plan to exit its Aerials segment will further reduce its exposure to cyclical end markets.
The resulting organization will feature low capital intensity, an attractive leverage profile, an efficient cost base with resilient and predictable earnings and free cash flow.
The combined company is expected to have an enhanced overall growth profile, creating a more diversified platform with multiple avenues for expansion.
The combined company is expected to have a stronger pro forma Adjusted EBITDA margin of approximately 14% for 2025, excluding Aerials and including synergies.

Risks

The occurrence of any event, change, or circumstance that could give rise to the right of one or both parties to terminate the definitive merger agreement.
The possibility that the transaction does not close when expected or at all because required regulatory, shareholder, or other approvals and conditions to closing are not received or satisfied on a timely basis or at all.
The risk that the benefits from the transaction, including realization of synergies, may not be fully realized or may take longer to realize than expected due to changes in general economic and market conditions, interest and exchange rates, monetary policy, trade policy, laws and regulations, and the degree of competition.
Any failure to promptly and effectively integrate the businesses of Terex and REV Group.
The possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events.
Reputational risk and potential adverse reactions of Terex's or REV Group's customers, employees, or other business partners, including those resulting from the announcement, pendency, or completion of the transaction.
Terex's issuance of additional shares of its capital stock in connection with the transaction.
The risk that Terex's exploration of strategic options to exit its Aerials segment may not be successful or that any transaction entered into with respect to Terex's Aerials segment is not on favorable terms.
Diversion of management's attention and time to the transaction and the exploration of strategic options with respect to the Terex Aerials segment and from ongoing business operations and opportunities.
The outcome of any legal proceedings that may be instituted against REV Group or Terex in connection with the transaction.
Additional important factors relating to Terex and REV Group that could cause actual results to differ materially from those in forward-looking statements include risks and contingencies detailed in their respective Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the SEC.

Future Outlook

The combined company is positioned for stronger, more sustainable growth over the long term, leveraging a diversified portfolio in resilient end markets. It aims to capitalize on long-term secular growth trends, benefit from domestic demand growth, and maintain financial discipline while fueling growth. Terex's planned exit from its Aerials segment is expected to further reduce exposure to cyclical markets, enhancing the overall stability and profitability of the combined entity.

Management Comments

Simon Meester (CEO of Terex): "This transaction represents a transformative step for both companies. By combining our complementary portfolios and leveraging our collective strengths, we are creating a large-scale, diversified industrial leader well-positioned to capitalize on long-term secular growth trends. The transaction will unlock significant value for both Terex and REV Group shareholders and creates exciting opportunities for our team members and customers by strengthening our ability to invest in the combined business, innovate and deliver quality solutions."
Mark Skonieczny (CEO of REV Group): "Joining forces with Terex is a natural evolution of our strategy of building a stronger, more profitable and scaled company by bringing together two highly respected organizations with shared values and a commitment to innovation, operational excellence, and customer success. We are beginning an exciting new chapter that will generate meaningful value for our shareholders, customers and employees."

Industry Context

The merger creates a diversified leader in specialty equipment, focusing on emergency, waste, utilities, environmental, and materials processing. These markets are characterized by low cyclicality, resilient demand, and long-term growth, underpinned by factors such as municipal tax receipts, regular equipment replacement cycles, urban sprawl, population growth, and sustained public sector investment in infrastructure. The combined entity will have a robust presence in North America, accounting for 83% of its pro forma sales, aligning with trends of domestic demand growth and critical infrastructure development.

Comparison to Industry Standards

The combined company's estimated pro forma Adjusted EBITDA margin of approximately 14% for 2025 (excluding Aerials and including synergies) is presented as competitive, comparing favorably to a 'Current Peer Median' of ~12% and slightly below a 'New Peer Median' of ~15%.
The 'Current Peer Median' includes companies such as ASTE, HRI, MTW, OSK, and URI.
The 'New Peer Median' includes FSS, PLOW, REVG, ALG, and TTC.
The implied EV / 26E Adjusted EBITDA multiple for the combined entity is positioned relative to a 'Current Peer Median' of ~8x and a 'New Peer Median' of ~11x, suggesting a target for a higher valuation multiple post-merger.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
President & Chief Executive Officer (Combined Company)	N/A (new role)	Simon Meester	Following the close	Merger of Terex and REV Group
Board of Directors (Combined Company)	N/A (new board)	12 directors (7 from Terex, 5 from REV Group)	Immediately following the Effective Time	Merger of Terex and REV Group
Chair of Audit Committee (Combined Company)	N/A (new role)	Legacy REV Director	From Effective Time until 2028 annual meeting	Corporate governance structure post-merger
Chair of Compensation and Human Capital Committee (Combined Company)	N/A (new role)	Legacy REV Director	From Effective Time until 2028 annual meeting	Corporate governance structure post-merger
Chair of Governance, Nominating and Corporate Responsibility Committee (Combined Company)	N/A (new role)	Legacy Terex Director	From Effective Time until 2028 annual meeting	Corporate governance structure post-merger
Chair of Board of Directors (Combined Company)	N/A (new role)	Legacy Terex Director	From Effective Time until 2028 annual meeting	Corporate governance structure post-merger
Vice Chairs of Board of Directors (Combined Company)	N/A (new role)	One Legacy Terex Director, One Legacy REV Director	From Effective Time until 2028 annual meeting	Corporate governance structure post-merger

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Board Composition	The combined company's board will consist of 12 directors: 7 individuals who are serving as directors of Terex immediately prior to the Effective Time (Legacy Terex Directors) and 5 individuals who are serving as directors of REV Group immediately prior to the Effective Time (Legacy REV Directors), who are independent with respect to Terex and designated by REV Group and reasonably acceptable to Terex.	Immediately following the Effective Time	Ensures representation from both merging entities on the new board, promoting integration and diverse perspectives while maintaining independence standards.
Director Nomination Policy	Through the 2027 annual meeting, 42% (rounded to the nearest whole number) of the Legacy Directors included on the slate of director nominees submitted by the Terex board will be Legacy REV Directors, and 58% (rounded) will be Legacy Terex Directors, unless agreed by two-thirds of all members of the Terex board (including the affirmative vote of at least two Legacy REV Directors).	Following the Closing through the 2027 annual meeting	Provides a structured approach to board continuity and integration post-merger, ensuring sustained representation from both legacy companies for a defined period.
Committee Chair Appointments	During the period from the Effective Time until Terex's 2028 annual meeting of stockholders, the Chair of the Audit Committee and the Chair of the Compensation and Human Capital Committee will be Legacy REV Directors. The Chair of the Terex board of directors and the Chair of the Governance, Nominating and Corporate Responsibility Committee will be Legacy Terex Directors. There will be two Vice Chairs of the Terex board, with one being a Legacy Terex Director and one a Legacy REV Director.	From the Effective Time until Terex's 2028 annual meeting	Distributes key leadership roles across the legacy companies, fostering balanced oversight and integration of governance practices within critical board committees.

Legal Proceedings

The transaction involves a risk of legal proceedings that may be instituted against REV Group or Terex in connection with the transaction.
Neither REV Group nor Terex, to their knowledge, has any pending or threatened actions or orders challenging or seeking to prevent, enjoin, or delay the transactions, other than those listed in their respective disclosure letters related to Antitrust Law or consumer protection Law.
Both parties are obligated to promptly notify each other of any stockholder or shareholder demands, lawsuits, arbitration demands, or other similar claims, actions, or proceedings (Transaction Litigation) commenced against them and/or their respective directors or officers relating to the merger agreement or the transactions contemplated.

Stakeholder Impact

Shareholders (REV Group): Will receive a mix of cash and Terex stock, becoming shareholders in a larger, more diversified company with anticipated synergies and growth potential.
Shareholders (Terex): Will own a larger, more diversified company with anticipated synergies and growth, and reduced exposure to cyclical markets through the Aerials segment exit.
Employees: Continuing employees are guaranteed comparable base salary/hourly wage, and no less favorable long-term and short-term incentive opportunities and benefits for specified periods post-closing.
Customers: Expected to benefit from the combined company's strengthened ability to invest in the business, innovate, and deliver quality solutions.
Business Partners (Suppliers, Distributors): Potential for adverse reactions is noted as a risk, but the overall intent is to strengthen the combined business and its market position.

Next Steps

Terex and REV Group will jointly prepare a preliminary proxy statement and Terex will file a Registration Statement on Form S-4 with the SEC.
The Joint Proxy Statement/Prospectus needs to be cleared by the SEC and the Form S-4 declared effective under the Securities Act.
The Joint Proxy Statement/Prospectus will be mailed to REV Group and Terex stockholders.
Separate stockholder meetings will be held for REV Group (to vote on the adoption and approval of the merger agreement) and Terex (to vote on the approval of the Tag Share Issuance).
Required regulatory clearances, including the expiration or termination of the waiting period under the HSR Act, must be obtained.
The shares of Terex Common Stock to be issued as merger consideration must be approved for listing on the NYSE.
Terex will initiate a process to exit its Aerials segment, including the assessment of a potential sale or spin-off.
The transaction is expected to close in the first half of 2026.

Key Dates

Date	Description
2023-01-01	Terex and Tag Subsidiaries compliance with Sarbanes-Oxley Act and general compliance with Laws and Orders since this date.
2023-10-31	REV Group timely filed or furnished all reports, schedules, forms, statements and other documents required to be filed or furnished by it with or to the SEC since this date.
2023-12-31	Tag timely filed or furnished all reports, schedules, forms, statements and other documents required to be filed or furnished by it with or to the SEC since this date.
2024-01-01	No material adverse effect on REV Group or Tag from certain changes since this date; no loss, damage, misuse, or unauthorized access of Personal Information maintained by or on behalf of REV Group or Tag since this date.
2025-01-01	Terex and Tag Subsidiaries compliance with Outbound Investment Rules since this date.
2025-01-17	REV Group's definitive proxy statement for its 2025 Annual Meeting of Stockholders filed with the SEC.
2025-04-01	Terex's definitive proxy statement in connection with its 2025 Annual Meeting of Stockholders filed with the SEC.
2025-04-13	Date of REV Group's Credit Agreement.
2025-07-30	Date of Confidentiality Agreement between REV Group and Terex.
2025-10-27	Close of business date for outstanding shares and stock awards for both REV Group and Terex.
2025-10-28	Closing share prices for Terex and REV Group used for implied total enterprise value calculation.
2025-10-29	Date of the Agreement and Plan of Merger between REV Group and Terex Corporation.
2025-10-30	Date of Report (earliest event reported); joint press release issued by Terex and REV Group announcing the merger; conference call for investors and the public to discuss the merger.
2026-04-29	Initial Termination Date for the merger if not consummated by this date.
2026-07-29	First Extended Outside Date for merger termination if regulatory waiting periods have not expired or approvals not received.
2026-10-29	Second Extended Outside Date for merger termination if regulatory waiting periods have not expired or approvals not received.
2027-12-31	End of Tag's fiscal year for which Continuing Employees will participate in annual cash incentive compensation plans.
2028-01-01	Period ends for certain corporate governance provisions (e.g., board composition, committee chairs).

Recommendation

strong buy

The strategic merger of Terex and REV Group is presented as a transformative step, creating a diversified leader in resilient, low-cyclical end markets. The projected $75 million in run-rate synergies, combined with Terex's plan to exit its cyclical Aerials segment, is expected to significantly enhance the combined company's financial profile, including a stronger Adjusted EBITDA margin and attractive leverage. The transaction is positioned to unlock substantial value for shareholders through enhanced scale, growth, and financial flexibility, making it a compelling investment opportunity.

Keywords

Merger, Acquisition, Specialty Equipment, Terex, REV Group, Industrial Equipment, Materials Processing, Waste Solutions, Utilities Equipment, Emergency Vehicles, Synergies, Corporate Governance, SEC Filing, Form 425, Form 8-K, Shareholder Approval, Regulatory Clearance, Aerials Segment Exit

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