Consolidation rolls on: Canam Manac will sell its trailer business

BOUCHERVILLE, Que. (Feb. 25) — Canam Manac Group of Ville de Saint-Georges, Que., said it has reached an agreement to sell its Manac semi-trailer division to Great Dane Limited Partnership (GDLP) for $87.5 million.

GDLP is an operating unit of Chicago-based CC Industries, which builds trailers under the Great Dane and Pines Trailer nameplates. GDLP will acquire all Manac assets, including assembly plants in St-Georges and Orangeville, Ont., and service centres in Quebec City, Boucherville, and Mississauga, Ont.

Manac is Canada’s largest semi-trailer manufacturer. It produced nearly 7500 trailers in 1998 and posted revenue of $229.6 million in 1998, up from $211.4 million in 1997. The company is expected to operate as a wholly owned subsidiary of GDLP with its current management team intact.

The transaction is payable 75% in cash with the balance in GDLP shares, said Canam Manac Group chairman Marcel Dutil. The sale is subject to regulatory approval, due diligence, and execution of a definitive purchase agreement.

The move will further consolidate the North American trailer manufacturing business. In December, Trailmobile Corp. purchased a 54% stake in Mond Industries of Mississauga for about $8.6 million. Trailmobile intends to use Mond’s two production lines in the Toronto area to produce about 5000 53-foot trailers a year for the U.S. Northeast and Canada.

Dutil said the sale “is in the best interest of Manac’s employees, customers, and suppliers as well as Canam Manac’s shareholders.” It will allow Canam Manac to focus on its core steel business, which posted sales of $1 billion in 1998.

Canam Manac began producing its own trailers in the 1960s when it could not find a suitable vehicle for hauling its steel products.