MANITOWOC Crane Group president Rob Giebel has ruled out the prospect of taking over Grove once it comes out of Chapter 11 protection.
Manitowoc has been interested in taking over Grove before in recent years but was put off from making a bid only by the heavy debt that Grove carried. With Grove’s balance sheet now being restructured, and ownership transferring to a group of banks, both the likelihood of a sale and Grove’s attractiveness have never been greater.
Having just spent $300m on buying Potain, said Giebel, Manitowoc is in no position to make a major acquisition for about two years.
‘Right now, our focus is clearly to pay down the debt,’ he told Cranes Today. ‘We are very conservative financial managers and right now we are going to focus on deleveraging. That doesn’t mean to say that we are not still hungry,’ he added, ‘but it will take a couple of years.’ Last month Grove was put in Chapter 11 protection by its owner, the investment group Keystone, which now has left the company. As part of a pre-arranged financial restructuring, lending banks are converting their debt to equity to take ownership and Grove’s balance sheet is being restructured to reduce debt from $584m to $205m.
A Manitowoc-Grove merger is considered by many as the North American crane industry’s dream team. Grove’s RTs, truck cranes and European-built ATs combined with Manitowoc’s lattice boom products makes an attractive combination. Only in boom trucks would there be overlap, though as they manufacture boom trucks at separate facilities – in different states – from their core businesses, hiving off one company’s boom trucks would be straightforward. It is not to be, however. Not yet, at least.
