Moving bits of paper around
Like many people, I am naturally suspicious of venture capitalists. While journalists and politicians normally come bottom of most people’s respectability scale, I have a Dickensian disregard for those people who make money simply by moving money around in mysterious ways, and never actually “do” anything except occasionally lay people off and give their friends lucrative consultancy contracts. Of course I recognise that my feelings are prejudiced by a combination of envy of their salaries and lifestyle, and bafflement at how their universe revolves. (How did the Bass brothers managed to make money out their brief ownership of Grove?)
Which brings me to Manitex, the US boom truck producer.
Until recently, Manitex was owned by Quantum Equipment, part of Quantum Associates, an associate operation of venture capitalists Quantum Value Partners. Quantum Equipment also owns forklift producers Noble Construction Equipment and Schaeff Inc and Illinois-based Terex crane dealer Crane & Machinery Inc (CMI). Quite an interesting group of companies is being brought together here.
On 27 February, however, Quantum announced its intention to transfer ownership of Manitex to another of its companies, Veri-Tek International Corporation. Veri-Tek produces testing equipment for automotive manufacturers and has annual sales in the region of $10m.
Does Manitex really sit better alongside Veri-Tek than Schaeff and CMI?
Failing to understand what was going on here, I called Michael Azar, who is a managing director of Quantum and vice-president of Veri-Tek.
He explains that Veri-Tek is a publicly traded stock, since a $15m flotation last year and since the crane market is so healthy right now, the addition of Manitex beefs up Veri-Tek’s loss-making balance sheet rather nicely.
As far as crane buyers are concerned, nothing has changed. Manitex will remain in Georgetown, Texas, and will continue to make the same great cranes. This ownership switch is nothing more than a financial exercise, and one that appears to be motivated by Veri-Tek’s best interests rather than Manitex’s. I don’t believe for a moment that Manitex will suffer in anyway from the change in ownership and with access to the capital markets may even benefit (although surely Quantum could have funded any acquisitions that Manitex might make?). However, it seems a slightly muddy episode to me and I look forward to it becoming clearer.
I can’t help feeling that life would be so much more straightforward if Manitex were owned by Link-Belt or Palfinger. Maybe that day will come before too long, once its assets have helped leverage Veri-Tek out of a corner. And I am sure that Veri-Tek will make a good profit on the sale.
Red diesel victory
Congratulations to UK mobile crane owners for successfully persuading the government to abandon its previously announced plan to end its special discount on fuel. Cranes are currently among special categories of off-highway vehicles that are allowed to use ‘red diesel’ which is taxed at a significantly lower rate than the standard ‘white diesel’ that goes in regular vehicles. Crane owners successfully argued that a) mobile cranes are off-highway vehicles and b) the sudden cost increase would be too much for them to bear. The bad news, though, is that the government is still likely to end the special dispensation given to cranes, but will do it gradually, rather than in one sudden hit. This issue has not gone away.
Bunny news
I was perusing the website of the UK’s Construction Industry Research & Information Association (CIRIA) the other day to check out its latest guidance on tower crane stability (turns out it had been holding some interesting sounding seminars around the UK, but I’d missed them all). Among all the worthy and important stuff about sustainable development, I was surprised to find that CIRIA has just published “A guide to rabbit management”. The description of this book says that it includes “chapters on the history of the rabbit in Europe, rabbit ecology and biology, myxomatosis and rabbit haemorrhagic disease”. Apparently rabbits are a big issue for road builders.
