For the past year, ag equipment insiders say they've known that Bush Hog has been looking for a buyer for its wide range of shortline products. The company, based in Selma, Ala., manufactures and markets ag-related machinery ranging from loaders and backhoes, rotary cutters and mowers, turf and landscape tools, and utility vehicles.
When the company sent workers at its Selma and Telford, Tenn., plants home for a two-week furlough following its holiday shutdown, it stoked more speculation about the company's future. The biggest rumor is that Case IH may be taking a long, hard look at acquiring the company.
A report in the Selma Times-Journal said the company announced that the production shut down was temporary "until the company could adjust inventory with demand."
David Middlebrooks, director of human resources, was quoted in the report as saying, "Our owners are evaluating all of their options. We are making adjustments in these tough economic times." Bush Hog is owned by Crown Industries of Chicago.
Why Case IH?
The recent speculation that Case IH may be a likely suitor for Bush Hog is being fueled in large part by reports that the second largest worldwide farm equipment maker is getting ready to introduce a line of implements aimed at the hobby farmer and rural lifestyle customer. It would appear that Bush Hog, with its well-established product line, would be an excellent fit for the Racine, Wis.-based manufacturer.
Bush Hog is perhaps the most recognized brand of ag-related shortline equipment. With dealers and end users often using the term "bush hogging" equipment the way many people use Xerox as a generic term for photocopying, the line would bring the new Case IH line instant identity.
As one industry observer told Ag Equipment Intelligence, "When your equipment brand name becomes a verb, you know you've got a high level of industry recognition."
Another industry source contacted by AEI sees the advantages that a Bush Hog acquisition could give Case IH, but at the same time questions the timing of the purchase.
He says the obvious advantage is that it would provide a source of implements and attachments to take cost out of these products, most of which are bought from someone else now.
"CNH [parent company of Case IH and New Holland] has not made an acquisition in some time. But it's not a good time to invest in the consumer-related segment of the industry, given the strong drop in compact tractor sales, "he says.
"This segment is lead by the New Holland brand and all of the management there is new, so I'd be skeptical of the rumor unless the acquisition price is very low."