Manitowoc of the USA is set to take over French tower crane manufacturer Potain, having submitted a binding offer of $300m. The offer was accepted in principle by the board of Legris Industries, Potain’s parent company, on 4 March.
The deal is subject to the completion of an environmental due diligence and clearance from anti-trust authorities. Legris said it would make a final decision after consulting employee representation bodies.
Potain had net sales of Euro 287m ($268m) in 2000 and Euro 240m in 1999. Operating profit in 2000 was Euro 35m.
Potain claims to have a 30% share of the world tower crane market, and believes it is marginally ahead of Liebherr in sales, and thus claims world leadership. Ninety percent of its sales are in Europe, and predominantly in France, Germany and Italy.
Manitowoc is a leading manufacturer of lattice boom crawler cranes that has grown strongly in the past five years but – with growth in the crawler market coming to the end of a cycle – it has been desperate to make a major acquisition to maintain that growth pattern. Potain had been identified as a potential target more than a year ago.
Manitowoc says that bringing Potain into Manitowoc Cranes "would create one of the world’s leading producers of lattice-boom crawler cranes, tower cranes, and boom trucks. The acquisition would combine the systems, technology, and applications expertise of these two industry leaders." Crane sales of the new company would be about $650m.
Manitowoc described the purchase price as approximately $300m (2.15bn French francs), plus net cash at 31 December 2000, subject to an adjustment for net earnings earned in the interim period. The deal will be financed by a new pre-arranged banking facility, Manitowoc said.
Potain, founded in 1928, manufactures a variety of tower crane types including top slewing, luffing jib, topless, and self-erecting units plus special models for dams and other large building projects. It employs approximately 2,200 people and has sold more than 88,000 cranes worldwide. Potain operates eight manufacturing facilities for tower cranes and related products in France, Germany, Italy, Portugal, and China, and is active in more than 50 countries through distribution subsidiaries or agents.
"This acquisition would present Manitowoc with a unique opportunity to broaden our product line into previously unserved areas, as well as to increase our geographic reach into key European and Asia-Pacific markets," said Terry Growcock, Manitowoc’s president and chief executive officer. "By combining Manitowoc’s strength as the world’s leading producer of high-capacity lattice-boom crane products and Potain’s position as the world’s leading manufacturer of tower cranes, we would be able to provide customers anywhere on the globe with an outstanding selection of lifting solutions." He added: "This combination further meets our strategic objectives to team with market innovators, expand our product range, and add to our manufacturing and distribution presence overseas. In addition, we expect this transaction to be accretive to our earnings per share in 2002." The bid comes at a time when the industry was rife with rumour that Manitowoc and Demag of Germany had agreed a tie-up, a deal which – according to unsubstantiated rumours – was to be announced at the Bauma fair in Germany next month.
