Generac Acquires Magnum Products for $80 Million

Acquisition of leading light tower and mobile generator manufacturer broadens commercial & industrial product offering, expands distribution channels and end markets

WAUKESHA, Wis., October 3 -- Generac Holdings Inc., a leading designer and manufacturer of back-up power generation products, announced today that one of its subsidiaries has acquired substantially all of the assets and certain liabilities of Magnum Products, LLC and its affiliates (collectively, Magnum Products) for $80 million in cash and a modest earn-out based on future performance of a particular product line currently in development. The execution of a definitive agreement and the closing of the transaction occurred on October 3, 2011.

Headquartered in Berlin, Wisconsin with 330 employees, Magnum Products is a leading manufacturer of high-quality light towers with an estimated 35% market share, and holds a strong and growing share in the mobile generator market. Its products are sold predominantly to industrial rental yards and government channels. With over 20 years of experience, Magnum Products is a trusted supplier to numerous end markets, including road construction, commercial construction, energy, mining, and the military. For the twelve months ended June 30, 2011, the Magnum Products business generated unaudited revenues of approximately $108 million and adjusted EBITDA of $14 million.

"Magnum Products is an excellent strategic fit for our business, bringing new products and incremental revenue opportunities to our commercial and industrial product offering, while also expanding the channels and end markets where we distribute our products," said Aaron Jagdfeld, President and Chief Executive Officer of Generac. "The acquisition of Magnum Products is directly in line with our long-term "Powering Ahead" strategy as it helps to expand our industrial market share, diversifies our end markets, and helps us grow our business outside of North America. Further, this acquisition allows us to balance our product portfolio as it increases our commercial and industrial product sales mix." Jagdfeld continued, "We have been disciplined with the use of our corporate cash having paid down nearly $100 million of debt over the last 12 months. In this acquisition, we saw an opportunity to use cash on our balance sheet to drive an even stronger return for our shareholders."

The Magnum Products business was principally owned by Tom Joseph, founder and Chairman of the company. Mr. Joseph will retire from the company following the announced acquisition. Commenting on the transaction, Mr. Joseph stated, "I am very pleased that Magnum Products will become part of a true market leader like Generac. Both companies do a tremendous job serving their respective end markets and the combination of them will be very powerful. I see a bright future for Magnum Products and Generac, and expect Magnum's strong leadership team to execute a seamless transition under Generac's ownership." Magnum Products will continue to operate out of its existing manufacturing facility in Berlin, Wisconsin and Generac intends to maintain the Magnum brand separately, given the company's strong reputation in the markets that it serves.

Generac expects the transaction to be immediately accretive to earnings in the fourth quarter of 2011, with the opportunity for additional accretion thereafter based on anticipated cost synergies. Based on current assumptions, the acquisition should add approximately $25-$30 million in revenue and $0.03-$0.04 in adjusted earnings per share in the fourth quarter of 2011, excluding approximately $1 million in transaction costs. Future cost synergies are targeted to total approximately $2 million on an annual basis, and are expected to be phased in throughout fiscal 2012.

Jagdfeld concluded, "The Magnum brand is highly regarded by its customers and stands for exceptional quality and customer service. We are very excited about the incremental revenue opportunities that we believe we can achieve through the combined efforts of Magnum's sales and engineering groups and those of our own. Additionally, we see meaningful opportunities for improved operating performance for the Magnum business by leveraging Generac's global sourcing and vertical manufacturing capabilities. Overall, we believe that the cultures and core values of the two organizations fit well together, and we look forward to achieving great things together."

About Generac

Since 1959, Generac has been a leading designer and manufacturer of a wide range of backup power generation products serving residential, light commercial and industrial markets. Generac's power systems range in output from 800 watts to 9 megawatts and are available through a broad network of independent dealers, retailers and wholesalers.

About Magnum Products, LLC

Magnum Products, LLC is a supplier of powerful, high quality light towers, mobile generators, trash pumps, water trailers and combination power units for a variety of industries and specialties including construction, energy, mining, government, military, and special events. The Company's products have been distributed through international, national and regional equipment rental companies, equipment dealers and construction companies.