Trailmobile to acquire ownership stake
Mond Industries Inc
MII
Shares issued 28,605,000
1998-12-15 close $0.57
Wednesday Dec 16 1998
Mr. Pat DiLillo reports
Trailmobile Corporation, North America's fourth largest trailer manufacturer, has agreed to acquire a
majority equity interest in Mond. The acquisition will result in a major expansion of Mond's
manufacturing and marketing operations and transform the Trailmobile/Mond partnership into the
continent's third largest trailer maker.
The agreement calls for the sale of shares to Trailmobile by Pat DiLillo, president of Mond and its largest
shareholder, and Denis Arsenault, CFO. Both Mr. DiLillo and Mr. will remain with the expanded
company as president and CFO, respectively.
Mr. DiLillo said the agreement affords Mond immediate access through the Trailmobile sales system to
the large, robust U.S. market that without this deal would have taken the company years to accomplish.
It also provides added strength both from the management viewpoint and the economic benefits of
critical mass, he added.
"In Trailmobile, we have a senior partner whose commitment to growth is as powerful as our own," Mr.
DiLillo said.
Edward Wanandi, chairman and CEO of Trailmobile, said the agreement will allow Trailmobile to
immediately expand its North American presence by integrating Mond's production and marketing
capabilities into its own network of manufacturing plants, distribution centres and dealership networks.
Synergies are expected to result in production economies and improved access to markets in both
Canada and the northeastern United States, providing attractive benefits to both companies.
"Most importantly, it will position Trailmobile as the No. 3 player in North America, and the sole
company with manufacturing facilities in each country," Mr. Wanandi said.
Mond has had strong demand for its products so far this year. Revenues by the end of the first nine
months of 1998 (the latest period reported) had increased by approximately 45 per cent over the same
period a year ago. The backlog of orders remains strong at about $32-million.
As part of the agreement with Trailmobile, the Mond board of directors will increase to eight members,
five of which will be Trailmobile nominees. Mr. Wanandi will assume chairmanship of the board. The
purchase price of the shares from Mr. DiLillo and Mr. Arsenault will be 50 cents per share. Trailmobile
will hold first right of refusal to purchase the remaining shares held by the two executives and related
parties.
As a result of the transaction, Trailmobile Corporation will acquire 17,365,000 shares of Mond and will
own a total of 19,500,000 shares of Mond, representing approximately 54 per cent of the outstanding
shares. Trailmobile has no current intention of acquiring additional shares, but may do so depending on
the circumstances, including pursuant to the right of first refusal, referred to above.
Trailmobile, a privately-owned company headquartered in Chicago, Illinois, manufactured 23,000
semi-trailers last year and generated revenue of approximately $520-million (U.S.). It has manufacturing
plants in Charleston, Illinois; Jonesboro, Arkansas; and a new refrigerated van facility in Liberal,
Kansas. Trailmobile also operates an 80,000 square foot parts distribution facility in Kentucky. The
company has dealers across Canada and the U.S.
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