BTD Manufacturing, Inc. (a wholly owned subsidiary of Otter Tail Corporation), announced today it has acquired Impulse Manufacturing of Dawsonville, Georgia, for $30.5 million in cash.
“Impulse brings a tradition of great service to its customers and allows us to accelerate our plans to expand into the Southeast to serve our growing customer base,” said BTD’s president, Paul Gintner. “Bringing our two organizations together will put us in a strong position to serve our customers.”
“Impulse’s customers and employees were our foremost concern as we pursued this new direction,” said Ron Baysden, who founded the company and served as its president. “BTD’s reputation and its management team provided me with the confidence that this was the right decision.” Ron will retire at the conclusion of the transaction.
Impulse plant manager and part owner Clay Reiser also focused on the benefit to customers. “The strength BTD and Otter Tail bring to our company will allow us to grow and improve our overall service to customers. BTD is well respected in our industry, and we welcome the opportunity to become part of their organization,” he said. Reiser will remain in a leadership role at the plant as will Karl and Jon Baysden, who also were part owners. BTD expects to retain the Impulse workforce.
Impulse had revenues of $27 million in 2014. Expected revenues for the remainder of 2015 are $11 million, and the results of operations for the last four months of the year will be negatively impacted by $.01 per common share as a result of business combination accounting principles. These accounting principles require the acquiring company to record inventory at its estimated selling price less the costs of disposal and a reasonable profit allowance for the new owner’s selling effort. As a result, Impulse’s inventory will be written up and gross margins in the last four months of 2015 will be lower than normal. Earnings from this acquisition are expected to be accretive for 2016. Financing for this transaction was obtained from Otter Tail Corporation’s $150 million credit facility.