Rush to Purchase Lake City’s Assets
Rush Enterprises said it plans to purchase the assets of Lake City Cos., the owner of a chain of International truck dealerships, for about $76.5 million.
Rush plans to split its truck dealership operations into two divisions — one to handle Peterbilt sales and one to handle sales of Navistar Inc.’s International trucks, the truck dealership said.
The deal expands Rush’s reach westward and allows the company to offer truck buyers vehicles with either of the two emission-control technologies that manufacturers used to meet the latest federal emission cuts — selective catalytic reduction or Navistar Inc.’s enhanced exhaust gas recirculation technology. Only International trucks use enhanced EGR.
The deal marks “an important milestone for our company,” said W.M. “Rusty” Rush, the company’s chief executive officer.
Buying Lake City’s dealerships “will enable us to expand Rush’s geographic footprint further across the Western United States . . . providing an opportunity to build the relationship we started with Navistar” in 2008, Rush said in a statement.
Rush said it expects the deal to close by late May. A company spokeswoman told Transport Topics Rush would provide a timeline for the restructuring and announce the executives who will be lead the new divisions at a later date.
When they are created, the two Rush divisions will operate separately, but the heads of both divisions will report to Rusty Rush.
The Peterbilt division will be molded from the current Rush Truck Centers network, and the Navistar group will contain the Lake City dealerships and Rush’s existing Navistar business. Rush started selling Navistar trucks in 2008, when it bought Rush International Truck Center in Charlotte, N.C.
“The announced acquisition will help [Rush] to diversify its heavy-duty truck business, currently dominated by Peterbilt; gain exposure to new medium-duty nameplates; and expand its higher-margin parts and services business,” Morgan Keegan & Co. analyst Chaz Jones wrote in a March 30 note to investors.
By Dan Leone
Staff Reporter
