Komatsu (TYO: 6301) is set to acquire the Roadtec business following a $75 million (C$107 million) agreement with Astec Industries (NASDAQ: ASTE).
The deal adds Roadtec- and Carlson-branded pavers, milling machines, material transfer vehicles and stabilizers to Komatsu's construction portfolio.
“Road construction plays an important role in building and maintaining the infrastructure that supports communities and economies in North America and around the world,” said Rod Bull, Komatsu North America’s CEO.
Based in Chattanooga, Tennessee, Roadtec designs and manufactures equipment used for road construction and resurfacing. According to Astec, the business generates about $145 million in yearly revenue.
“North America is one of Komatsu’s key markets, and this acquisition reflects our continued commitment to investing in the region,” said Takuya Imayoshi, Komatsu’s president and CEO. “Komatsu has long recognized the strategic importance of road construction equipment and has considered opportunities to expand in this market for many years.”
The transaction is expected to close Jan. 1, 2027, subject to customary closing conditions.
Astec surge
Shares in Astec rose 4.99% to $39.35 apiece Thursday morning in New York following the announcement.
The company expects to realize about $65 million in total cash proceeds and tax benefits associated with the sale. It says it will use this money to strengthen balance sheets and provide flexibility to pursue future strategic acquisitions.
“This transaction is consistent with our strategy to sharpen our portfolio focus, drive sustainable margin expansion and allocate capital toward our core businesses and long-term growth opportunities,” said Jaco van der Merwe, Astec’s president and CEO. “I want to thank our Roadtec employees for their dedication and contributions and our customers for their partnership and loyalty over the years.”
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