MANITOWOC’S acquisition of Potain was completed on 9 May. The final purchase price of the acquisition was $307.1m, plus Potain’s net income from 1 January 2001 through the closing date.
Potain joins Manitowoc’s Crane segment, creating one of the world’s largest producers of lifting equipment.
‘We are extremely pleased to welcome the over 2,200 employees of Potain to the Manitowoc family,’ said Terry Growcock, Manitowoc’s president and chief executive officer. ‘This strategic addition to our Crane segment presents Manitowoc with a host of opportunities for growth, including further penetration into key European and Asian markets and the expansion of our product line to encompass a greater variety of lifting solutions.
‘In addition, we will now be able to extend our crane manufacturing capabilities to a third continent and take full advantage of synergies in distribution, material procurement, manufacturing, and product marketing.’ Manitowoc chief financial officer Glen Tellock said he expected Potain to be ‘EVA positive’ within 24 months, referring to the financial yardstick that Manitowoc uses – economic value added. Failure to meet EVA targets led to the disposal of several Manitowoc company-owned distribution and service operations in recent years.
Descibing the contribution expected of Potain, Tellock said: ‘For the remainder of the year, we expect Potain to generate over $200m in revenue and be neutral to Manitowoc’s earnings, but to be approximately $0.10 to $0.15 accretive to earnings in 2002.
‘Potain’s operating margins should approach 15% by year-end. Our interest expense in 2001 is expected to increase approximately $21m. Goodwill associated with the transaction is expected to be amortised over 40 years, or approximately $5m per year. We expect that capital expenditures at Potain will be in the $5m to $10m range for 2001. With Potain as a part of Manitowoc’s crane operations, we are on the verge of achieving our Vision 2002 goal of $1.3bn in consolidated revenue.” The Potain acquisisiton was part-funded by E170m raised on the European markets through bonds, applications for which were three times oversubscribed, despite Manitowoc not being a well known name in the European financial community.
