Columbus McKinnon Corporation has completed its review of strategic alternatives and opted to scale back the company rather than sell it.
The official line is that the company “will focus on implementing a programme of strategic, operational, and financial initiatives designed to enhance shareholder value”. In lay terms, this means cutbacks and closures.
“Over the last year, management and the board have been engaged, with the assistance of a financial advisor, in an extensive evaluation of numerous options for maximising shareholder value, including a possible sale or merger of the company,” said Timothy Tevens, president and chief executive officer.
“Following extensive discussions with potential strategic and financial buyers, our board of directors has concluded that shareholder interest would be best served by focusing all our resources and energies on improving CM’s financial strength and performance. We are committed to increasing CM’s value and, to accomplish this, have begun implementing a comprehensive programme of major initiatives to further streamline our operations and enhance future profitability, such as rationalising our productive capabilities and implementing lean manufacturing methods.” Tevens continued: “Strategically, we will continue to evaluate and restructure the company to ensure that we have the optimal business mix. We will also continue to focus on internal growth, concentrating on international markets where there is significant growth opportunity, particularly in Europe, South America, and Asia. Operationally, we have identified several areas of our business which will benefit from product line and manufacturing process rationalisation as well as further integration of operations. We anticipate that these initiatives will have a significant favourable impact on our cost structure and our ability to better serve our customers. Financially, we will focus on strengthening our balance sheet and lowering our debt-to-equity ratio while at the same time continuing to analyse strategic acquisitions to strengthen our optimal business mix.” Tevens concluded: “While the current business environment is a challenging one, CM’s fundamental strength, market leadership, and strong cash flow continue to provide an excellent platform for building long-term value for our shareholders.”
