Ferronordic, a Volvo Construction Equipment dealer with 28 locations in Germany and Kazakhstan, is expanding into the U.S. market with its purchase of Rudd Equipment Company.
The $95 million deal is expected to close on November 30. In addition to the equipment business, Ferronordic will purchase two properties in Cincinnati and Louisville that Rudd currently rents for $10 million. After this, Rudd will own 8 of the 13 locations used to operate the business.
Headquartered in Louisville, Kentucky, Rudd is one of the largest Volvo CE distributors in the U.S. Its 13 locations and 360 employees serve customers in all or parts of Kentucky, Ohio, Indiana, West Virginia, Pennsylvania, Missouri, Illinois, Tennessee and Maryland.
According to the announcement, Rudd had sales of $308.3 million with an operating income of $16.5 million and earnings before tax of $16.4 million in 2022. In addition to Volvo CE, Rudd sells and services Hitachi, Sandvik and Link-Belt.
The new owner does not intend to change the current business structure and has committed to retaining all employees under their current terms and conditions for at least 12 months. Upon closing, Rudd will be a wholly owned subsidiary of Ferronordic AB.
Commenting on the acquisition, Lars Corneliusson, Ferronordic's CEO, said: "This is a transformational transaction for us. We have been looking for opportunities to expand geographically in different regions, mainly in developed markets. The U.S. is the world's second-largest market for construction equipment with substantive infrastructure investment programs that are likely to support strong demand going forward."
Scott Young, Head of Sales Region North America, Volvo CE added: "We are excited to welcome Ferronordic into the North American dealer network. Cultivating strategic partnerships is about creating shared value and driving mutual growth. There are incredible opportunities ahead as we continue to provide best-in-line equipment, solutions, and support to our customers."
Lars Corneliusson continued: "Rudd is a great strategic fit for Ferronordic and provides the platform and scale we have been looking for. The acquisition gives a strong base in a dynamic market that opens potential for further expansion in North America. This is a first major step to rebuild Ferronordic as a leading service and sales company, in addition to our businesses in Germany and Kazakhstan.”
Founded in 1952, Rudd has historically focused on excavation and extractive industries, particularly in Kentucky and West Virginia. Recently, the company has put more emphasis on the general construction segment, with Ferronordic citing opportunities to grow the company's market share in this segment further, especially in the St. Louis, Pittsburgh and Cleveland metro areas.
All consents for the transaction, including the approval of Volvo CE, have been obtained. Ferronordic does not expect the deal to have a direct impact on its business in Germany and Kazakhstan.
