Manitowoc has put its boom truck division up for sale after reaching an an agreement reached with the US Department of Justice over its acquisition of Grove.
Manitowoc announced its intent to acquire Grove on 18 March, subject to shareholder and regulatory approvals. The agreement with the Department of Justice means that Manitowoc must divest one of the boom truck businesses, either its own, or Grove’s National Crane subsidiary. Manitowoc said that it would try to sell Manitowoc Boom Trucks, Inc., its operation based in Georgetown, Texas.
Bringing together the two boom truck businesses was always likely to generate concern over competition. Resolution of the issue meant that Manitowoc’s acquisition of Grove, can now close by mid August.
‘After considerable effort by both Manitowoc and Grove to negotiate another outcome, we saw no other way to meet regulatory requirements without entering into costly litigation that would not serve the best interests of our shareholders, customers, and employees,’ said Manitowoc Company Inc president and chief executive officer Terry Growcock, Manitowoc’s president and chief executive officer. ‘However, we believe the resulting Grove acquisition will benefit our company and the crane industry long-term.’
Glen Tellock, president of Manitowoc Crane Group, added: ‘On a positive note for the employees, distributors, and customers of Manitowoc Boom Trucks, the Department of Justice also stipulated that the sale be made to a buyer who will keep the business as a viable competitor after the sale. In the interim, we will continue to design, manufacture, and deliver the highest-quality products and services throughout the sale process.’
On 25 June Manitowoc announced that it would record a $51m goodwill impairment charge this year to comply with a new US accounting standard relating to how goodwill is recorded on balance sheets. The company said that $33.1m of the charge was for its beverage group and $17.9m for the boom trucks unit.
It was not clear how much of the goodwill in the boom truck operation’s accounts is a hangover from the 1998 acquisitions of USTC and Pioneer. Manitowoc paid $53.927m for USTC, of which the ‘direct acquisition costs’ were just $337,000 and assumed liabilities (i.e. debts) were $8.067m.
Companies interested in acquiring a US boom truck manufacturer are likely to include Palfinger of Austria, the most expansionist of the European knuckle boom crane manufacturers.
