Today’s Pickup: Spartan Motors to focus on commercial, last-mile delivery business

Utilimaster truck body

Good day,

Spartan Motors (NASDAQ: SPAR), best known as a specialty body builder, has sold its Emergency Response (ER) segment so it can focus efforts on its commercial and retail vehicle industries, which include the Utilimaster brand of van bodies.

Spartan sold the ER business, which includes purpose-built fire truck bodies, to REV Group Inc. (NYSE: REVG) for $55 million in cash. The transaction has been unanimously approved by the company’s board of directors. As part of the transaction, Spartan has sold the Spartan name to REV and will rebrand its remaining business in the months ahead.

“The divestiture of the ER business unit will give us the speed and flexibility needed to further focus on accelerating growth and profitability in our commercial, fleet, delivery and specialty vehicles markets where we see the biggest opportunity to generate higher returns,” said Daryl Adams, president and CEO. “By freeing up additional resources and capital to better serve our target markets and make additional strategic investments, we can continue to evolve to meet the needs of our customers and provide long-term value to our shareholders.”

Spartan’s commercial business includes work truck bodies as well as Utilimaster and Royal Truck Bodies. At the 2019 Work Truck Show, Utilimaster showed a concept cargo body designed for last-mile grocery delivery. The body features a Thermo King refrigeration system that allows the customer to cool various cargo chambers to varying degrees. The Thermo King system can hold temperatures to 25 degrees below zero overnight.

Adams told FreightWaves at the event the company expects the last-mile grocery delivery business to reach $100 billion in North America by 2025.

Utilimaster produces walk-in vans, cargo van upfits and the Reach van. The Reach is a smaller version of the often larger walk-in vans. It is built on an Isuzu chassis.

Spartan said the ER business unit had revenue of approximately $253.3 million for the 12 months ended Sept. 30, 2019. Proceeds from the sale, effective this past Saturday, will initially be used to pay down debt and support working capital requirements.

“The divestiture marks an important step in our business transformation. E-commerce, electrification and autonomous technologies are driving dramatic change in the industry, and this action positions us to continue to provide leading solutions for our customers. I appreciate the dedication of our ER associates over the past 45 years and I wish them success,” Adams said.

Did you know?

Connecticut said its plan to add electronic tolls for trucks in the state at 12 locations would generate $230.1 million per year for infrastructure projects. The toll plan is slated to be voted on the week of Feb.10.


“Typically, demand does not return for ex-Asia front hauls until the start of March, but the latest developments point to an even longer recovery time. … [There] should there be further delays in the recovery of Chinese manufacturing, these measures may not prove enough.”

— Platts Global Container Weekly commentary on the impact of the coronavirus outbreak on Chinese exports

In other news:

Underground deliveries?

Startup company Magway wants to revolutionize last-mile delivery with underground tunnels and trucks moving along magnetic tracks. (WFAA)

Midwest manufacturing slumping

The Chicago Purchasing Managers Index fell to 42.9 from 48.9 in December, its lowest level since December 2015, far outpacing the dip economists expected. (MarketWatch)

Aftermarket products seeing new life

Truck manufacturers are now designing products with the aftermarket in mind, said a leading aftermarket expert, and that is giving products new life. (Heavy Duty Trucking)

Is 2019 the year of technology use cases?

Technologies such as blockchain, machine learning and artificial intelligence will underpin advanced case studies this year, moving such technologies into the mainstream. (Cerasis)

Truckers plan protest convoy over cap-and-trade bill

Oregon truckers are planning a multicity convoy for Thursday to protest a cap-and-trade bill that would limit carbon emissions statewide. (The Register-Guard)

Final thoughts

It appears that Connecticut may be the next state to pass a truck-only toll plan when the legislature votes next week. Barring a last-minute hiccup, the plan is estimated to add $230.1 million to the state’s transportation fund. Connecticut would join Rhode Island as Northeast states with truck-only tolls. Rhode Island is being sued by trucking groups and recently said its toll revenue has fallen short of projections by nearly $17 million due to delays in getting electronic toll gantries operational. Connecticut will undoubtedly also be sued over the plan if the bill passes, but it shows the lengths states will go to to fund infrastructure projects as gas tax revenues continue to produce a shortfall.

Hammer down, everyone!