Konecranes bought the company by approaching its individual shareholders, rather than approaching it directly. As a result, the acquisition was announced in stages: on 19 May, it announced it had purchased 59.2% of the company, and then a week later upping its stake to 74.5%, and then to 90.9% and then finally the remaining shares were announced days later. Hoist magazine reported that there were about 10 major shareholders and the remainder of the Morris stock was split among many small-scale investors.
Konecranes was attracted to Morris because of its position in three crucial markets in the US – steel, wood and nuclear power, CEO Pekka Lundmark told Cranes Today sister magazine Hoist. Lundmark reported that Morris has around 100,000 cranes and hoists in operation and the long-term prospects in these industries remain promising.
“Morris also has a large installed base and the spare parts, maintenance and modernisation opportunities it represents are widespread,” the company said.
The acquisition makes a farce of a three-year legal wrangling between Morris Material Handling and Konecranes Inc about competition for aftermarket parts, currently scheduled for trial in August. In the case, Konecranes sued for the return of a deposit of $250,000 it paid Morris during the initial stages of a previous acquisition that fell through.
Previously, MMH sued Konecranes for a trademark violation. Of course, Konecranes has always disputed these allegations.
Lundmark told Hoist that the acquisition will end the lawsuits. “It is unlikely that we were going to continue to sue ourselves,” he joked.
“We like the company,” he said, “and we hope to keep a large part of as many of the management in their current positions as possible,” Lundmark said.
“We think Morris is an excellent company and we hope for them to remain trading under their own identity.”
Morris Material Handling Inc. and its subsidiaries (MMH) had annual sales of approximately $170m in fiscal year 2005, which ended 31 October 2005. First half of fiscal year 2006 sales were $102m, with an operating profit of $5.5m (5.4% of sales). Trading has not always been so good. The company filed for Chapter 11 bankruptcy protection six years ago.
In January 2005, Konecranes purchased Morris Material Handling UK, a British-owned offshoot of Morris that was hived off six years ago. Also last year it bought a prominent German rival, hoist manufacturer and crane builder R Stahl Foerdertechnik.
