Fantuzzi missed a deadline for the repayment of the final tranche of a debt agreement in July 2008. The Italian company’s financial troubles prompted a battle to acquire the company, pitching Terex against Manitowoc, Kalmar and Konecranes. Terex signed an initial agreement to acquire the business for EUR215m in August 2008.
The deal progressed through regulatory approval in the latter half of 2008, receiving approval from the European Commission on 19 November. On 21 November, only two days after receiving the EC’s approval for the deal, Terex told the US financial regulator, the SEC, that a ‘material adverse change’ may scupper the deal. Terex said it was requesting more information from the Italians.
On 15 December, Terex told Fantuzzi that it was cancelling the agreement; it informed the SEC of the cancellation on 19 December. Fantuzzi responded by saying that, as far as it was concerned, the deal was still in place, and threatened arbitration proceedings (and potential legal action) against Terex.
Terex has now announced that a new deal has been agreed. In its announcement, the company said, “Terex Corporation today announced that it has agreed on a term sheet to acquire the port equipment businesses of Fantuzzi Industries and Noell Crane for net consideration of approximately €175m.
“Term sheets have also been agreed with the existing financial creditors to the Fantuzzi group for long-term financing on favourable terms to provide substantially all of the funds necessary to complete the transaction. The term sheets are non-binding and it is the intention of the parties to work to enter into agreements and complete the transaction within the next few weeks.”
At the time of the initial agreement, one Euro was worth roughly USD1.55; now, one Euro is worth around USD1.32. On that basis, the EUR215m August 2008 purchase price would have cost around USD334.62m; the Euro price announced today is worth around USD231.28m.
Rick Nichols, president of Terex Cranes, said, “Immediately after closing we will begin to work with Fantuzzi’s team members, suppliers, distributors, customers and other stakeholders to aggressively restructure and position these businesses for the eventual recovery in their markets.”
Terex CFO Phil Widman said, “Upon completion of this transaction, our debt levels will increase modestly due to the financing provided from the existing financial creditors. With the long term maturities and expected company-wide cash flow generation, we believe liquidity should be sufficient to get us through the economic downturn.”
