Trailmobile acquires 54% stake in Mond

MISSISSAUGA, Ont. (Dec. 21) — Trailmobile Corp., North America’s fourth-largest trailer manufacturer, has acquired a 54% stake in Mississauga, Ont.-based Mond Industries, the second-largest trailer-builder in Canada.

Trailmobile said it bought 17,365,000 common shares from Mond president Pat DiLillo and chief financial officer Denis Arsenault for 50 cents per share.

The sale gives Chicago-based Trailmobile, a privately owned company, a total of 19,500,000 common shares of Mond, representing 54% of the outstanding common shares.

“More importantly, it will position Trailmobile as the No. 3 player in North America, and the sole company with manufacturing facilities in both countries,” said Trailmobile chairman and CEO Edward Wanandi.

Wanandi will become chairman of Mond’s board of directors, which will be increased to eight members, five nominated by Trailmobile. DiLillo and Arsenault have signed contracts to remain with Mond as president and CFO, respectively.

Trailmobile and Mond will integrate their production, sales, and marketing functions over the next year, said DiLillo, adding that Mond’s assembly plant in Mississauga, Ont., will start producing dry-freight vans with Trailmobile badges “within the next three to four months.”

The plant’s output of 14 vehicles per day will be increased to 30 with the addition of Trailmobile-branded trailers, he said.

“We have a great partner in Trailmobile,” DiLillo said. “They make products we don’t make, and with their expertise and knowledge we can take this company to another level. It’s great for Canada and great for the market.”

Trailmobile built 23,000 semi-trailers in 1997 and generated revenues of $520 million US. It has plants in Charleston, Ill.; Jonesboro, Ark.; and Liberal, Kan. The company also operates an 80,000-square-foot parts distribution centre in Kentucky and has dealers across Canada.

Mond is Canada’s largest manufacturer of domestic intermodal containers, and also designs, builds, services, and repairs a line of standard and customized trailers, trailer chassis, dry freight vans, and temperature-controlled vans. Mond sells its products in Canada using its own sales force and through a nationwide dealer network. The company employs 450.

Mond reports a backlog of orders valued at $32 million, and a 45% increase in revenues during the first nine months of 1998 compared with the same period a year ago.

Mond’s shares trade on the Toronto Stock Exchange under the symbol MII. They opened the day at 48 cents. The stock traded as high as 78 cents on Dec. 16, rising on speculation the company would be sold.