Terex and REV Group to merge, creating specialty equipment leader

NORWALK, Conn./BROOKFIELD, Wis. - Terex Corporation (NYSE:TEX) and REV Group (NYSE:REVG) announced Thursday they have entered into a definitive merger agreement to create a diversified specialty equipment manufacturer focused on emergency, waste, utilities, environmental and materials processing equipment. REV Group, currently valued at $2.93 billion, has seen remarkable growth with a 125% return over the past year according to InvestingPro data.

Under the terms of the agreement, REV Group shareholders will receive 0.9809 shares of the combined company and $8.71 in cash for each REV Group share. Following the transaction, Terex shareholders will own approximately 58% of the combined company, while REV Group shareholders will hold about 42%.

The merged entity, which will continue trading on the NYSE under the symbol TEX, is expected to generate approximately $7.8 billion in net sales with an adjusted EBITDA margin of about 11% by year-end 2025, according to the companies’ statement. REV Group currently generates $2.4 billion in annual revenue with a healthy EBITDA of $196.5 million for the last twelve months, as revealed in InvestingPro financial metrics.

Terex also announced plans to exit its Aerials segment, exploring options including a potential sale or spin-off, which would further reduce its exposure to cyclical markets.

The companies project $75 million in run-rate synergies by 2028, with approximately half to be achieved within 12 months after closing. The transaction is expected to close in the first half of 2026, subject to shareholder and regulatory approvals.

"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," said Terex CEO Simon Meester, who will serve as President and CEO of the combined company.

The merger will create a company with low capital intensity, an attractive leverage profile, and resilient earnings in markets characterized by low cyclicality and long-term growth potential, according to the press release statement.

Following the close, the board of the combined company will consist of 12 directors, with 7 from Terex and 5 from REV Group.

In other recent news, REV Group Inc. reported impressive fiscal third-quarter 2025 earnings, with an earnings per share of $0.79, surpassing the anticipated $0.63. The company’s revenue also exceeded expectations, reaching $644.9 million. Following these results, REV Group has adjusted its full-year revenue and EBITDA guidance upward, indicating a positive outlook on its future performance. Additionally, REV Group announced strong sales at two major industry events, with a 20% increase in units sold at America’s Largest RV Show in Hershey, Pennsylvania, compared to last year. The American Coach luxury Class A diesel brand, in particular, saw a 66% increase in sales over 2024 results.

Analyst firm DA Davidson has reiterated a Buy rating on REV Group, citing significant growth in RV chassis orders, which increased 224% year-over-year in August, and 175% in September. This positive rating is supported by encouraging industry data and the company’s performance at recent events. These developments suggest a robust demand for REV Group’s products in the recreational vehicle market.

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