To The Moon

$Terex(TEX)$ 

My original holding is REV.

Executive Summary

Terex Corporation has made two transformative acquisitions in recent years, fundamentally reshaping its portfolio toward less cyclical, essential-service end markets. The Environmental Solutions Group (ESG) acquisition in 2024 expanded Terex's presence in the waste and recycling industry, while the REV Group merger in 2026 created a diversified specialty equipment leader spanning emergency services, waste management, utilities, and construction. These deals build on a long corporate history of strategic acquisitions dating back to the pivotal 2002 Genie purchase.

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Major Recent Acquisitions

1. ESG Acquisition (2024) — Waste & Recycling Market Entry

· Target: Environmental Solutions Group (ESG), acquired from Dover Corporation

· Price: $2.0 billion all-cash; $1.725 billion net of expected tax benefits

· Announced: July 22, 2024

· Completed: October 8, 2024

· Valuation Multiple: Approximately 8.4x 2024E EBITDA including run-rate synergies

ESG is the leader in refuse collection vehicles, waste compaction equipment, and associated parts and digital solutions, with brands including Heil, Marathon, Curotto-Can, Bayne Thinline, and digital solutions 3rd Eye and Soft-Pak. The business had demonstrated a 7%+ long-term organic revenue CAGR over the prior decade .

Strategic Rationale:

· Added meaningful scale and significantly reduced cyclicality through a non-cyclical, financially accretive business

· Tangible cost and revenue synergies of approximately $25 million targeted by end of 2026, largely from procurement, supply chain efficiencies, and commercial initiatives

· Expanded North American addressable market

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2. REV Group Merger (2026) — Specialty Equipment Powerhouse

· Target: REV Group, Inc. (NYSE: REVG)

· Transaction Value: $3.2 billion

· Announced: October 29, 2025

· Completed: February 2, 2026

· Structure: Stock and cash; REV shareholders received 0.9809 Terex shares plus $8.71 cash per REV share

· Ownership Split: Terex shareholders ~58%, REV shareholders ~42%

REV Group brought approximately 230 million of adjusted EBITDA, with the majority tied to essential low-cyclical end markets . The combined entity manufactures fire trucks, ambulances, recreational vehicles, waste collection vehicles, materials processing machinery, and mobile elevating work platforms .

Synergies:

· 37.5 million within 12 months of closing

· Early savings expected primarily from eliminating duplicate corporate costs

· 2026 guidance includes approximately $28 million of synergies

Concurrent Strategic Actions:

· Terex announced plans to exit its Aerials segment (including potential sale or spin-off of the legacy Genie business), further reducing cyclical exposure

· Five former REV directors joined the Terex board, creating a 12-member board

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3. Heil Transaction (Legacy ESG Component)

While not a standalone acquisition, the Heil garbage truck business was highlighted as a key component of the ESG deal. The acquisition added a new revenue stream for Terex, though it also increased debt . This transaction marked the beginning of the company's strategic pivot under CEO Simon Meester toward less cyclical, essential-service equipment markets.

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Historical Context: Terex's Acquisition DNA

Terex has a long history of using acquisitions to transform its portfolio. Key historical milestones include:

· 2002 — Genie Aerial Work Platform Business: The pivotal acquisition of Genie established Terex as a major player in mobile elevating work platforms. This business formed the core of the Aerials segment that the company is now planning to exit .

· Pre-2024 Portfolio Restructuring: Following the Genie acquisition, Terex engaged in cycles of strategic divestments and balance sheet strengthening under CEO John Garrison, who completed a turnaround and set ambitious 2027 profit targets .

· 2025–2026 Strategic Pivot: Under current CEO Simon Meester, the company has aggressively pivoted toward less cyclical, essential-service end markets through the ESG and REV transactions .

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Combined Financial Impact

Following the REV merger, Terex projects:

Metric Projected Value

Net Sales (2026E) 8.1 billion

EBITDA (2026E) 1.0 billion

EPS (2026E) 5.00

Backlog ~$7.1 billion

Combined Revenue (at announcement) ~$7.8 billion

Post-close, the company operates with a net debt-to-EBITDA ratio of approximately 2.5x and maintains approximately $1.0 billion in liquidity .

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Strategic Transformation Summary

The ESG and REV acquisitions collectively represent a deliberate strategy to reduce Terex's exposure to cyclical construction and aerial equipment markets while building leadership in essential-service sectors with government-backed or non-discretionary demand drivers. After these deals, roughly 70% of Terex's sales come from emergency vehicles, waste and recycling, and utilities segments — industries characterized by resilient, low-cyclical demand .

The concurrent planned divestiture of the Aerials segment (Genie) represents the final chapter in this portfolio transformation, with management evaluating strategic options to maximize shareholder value . The combined entity now operates as a large-scale specialty equipment manufacturer with a primarily U.S. manufacturing footprint .

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Note: Q1 2026 results showed a net loss of $89 million driven largely by merger-related accounting and amortization charges tied to the REV acquisition, but management reaffirmed full-year guidance and highlighted integration progress.