Terex Wins Twice (TEX, ASVI)

Terex Corp. (NYSE: TEX) is seeing a double plus good reaction this morning.  This weekend’s version of Barron’s noted a solid long-term opportunity in shares of the company AND it is making an acquisition.

Barron’s noted that Terex shares have fallen from over $96.00 in summer down to the low-$50’s recently.  Barron’s noted that while half of its profits do come from aerial platform construction, 45% of those platform revenues are international sales.  65% of all sales are tallied up as being from abroad.  Barron’s also showed that even if it was valued at five times its expected 2008 pretax cash flow or if it were to be sold at 10 times pretax cash flow, it could bring in $100 a share.

Then this morning the company came out with an acquisition.  It is spending $488 million (compared to a $5.4 Billion market cap) to acquire construction equipment maker A.S.V. Inc. (NASDAQ:ASVI) in a stock transaction at $18.00 per share before dilution.  The company said that if a majority votes along with the deal and as long as no regulatory issues are present, that it will close this merger by the end of the first quarter.

ASVI shares are up 44% at $17.75 in pre-market trading and shares have traded in a 52-week range of $10.11 to $19.45.  Terex shares are up almost 4% pre-market at $54.95, and its 52-week trading range is 48.95 to $96.94.

Jon C. Ogg
January 14, 2008