'Amazon Effect' Drives Wabash National's Supreme Acquisition
LAFAYETTE and GOSHEN - Lafayette-based Wabash National Corp. (NYSE: WNC) officials say the so-called "Amazon Effect" was a catalyst in plans to acquire Goshen-based Supreme Industries Inc. (NYSEMKT: STS). The continued growth of e-commerce drove the truck trailer manufacturer to offer $21 per share, or $364 million in equity value, for the second-largest truck body maker in America. Consumer demand and growth are so high for home delivery, Wabash National leaders say, that the company will launch a "final mile" business unit if the deal clears remaining hurdles.
In a conference call with investors Wednesday, Chief Executive Officer Dick Giromini says the acquisition of Supreme will position Wabash National where trends continue to head. He calls the planned combination "a perfect marriage," citing the company's continued push toward diversification, Supreme's revenue stream that totals $300 million and anticipated cost synergies of $20 million or more a year by 2021.
Giromini says "consumers was fast delivery to their homes and virtually no consumer good is off-limits." He says industry estimates suggest e-commerce, which now makes up 8 percent of retail sales, will double in market penetration by 2021. Wabash National's entry into e-commerce-focused manufacturing came two years ago when it launched a dry and refrigerated truck body manufacturing line in Tippecanoe County.