KCI Konecranes raises its sales growth guidance for year 2006 to exceed 35% over 2005 compared to the previous guidance of over 25%. The revision to previously announced guidance is primarily the result of the acquisition of MMH Holdings, Inc., the owner of U.S. based Morris Material Handling, Inc. Furthermore, KCI Konecranes sees continued good market conditions and currently no signs of slow down in market demand.
Konecranes Inc.’s subsidiary, HMM Acquisition Corp., further increased its stake in MMH Holdings, Inc. to 96.7% and then completed a short form merger as a result of which Konecranes, Inc. now owns 100% of MMH Holdings, Inc. shares.
The total acquisition price for the 100% ownership amounts to approximately USD 64.6 M. The net debt amounts to approximately USD 5 M which gives a total enterprise value of approximately USD 70 M. MMH Holdings, Inc will be consolidated into the KCI Konecranes Group figures as of 1 June 2006. Operationally MMH Holdings, Inc. continues as an independent entity within the KCI Konecranes Group.
Morris Material Handling Inc. and its subsidiaries (MMH) had annual sales of approximately USD 170 M in fiscal year 2005, which ended 31 October 2005. First half of fiscal year 2006 sales were USD 102 M, with an operating profit of USD 5.5 M (5.4 % of sales). MMH is expected to generate sales of approximately EUR 90 M for the period June-December 2006, with an estimated EBITDA margin of 8% and an EBIT margin of 6%. The current order book stands at approximately EUR 77 M.
The acquisition is expected to be earnings per share (EPS) accretive before synergies, adding approximately EUR 0.03 to KCI Konecranes EPS in year 2006. On an annualised level the positive impact before synergies equals to EUR 0.06 per share. The acquisition will temporarily increase the KCI Konecranes Group’s gearing and lower the solidity, but this effect is expected to be mitigated by positive future cash flows.
With over 120 years of history in North America, Morris Material Handling, Inc., is a recognised player in the maintenance service and overhead crane industry. The addition of MMH’s product ranges especially for the steel industry complements KCI Konecranes’ offering. The acquisition also brings new opportunities for growth in Maintenance Services through the large installed base of MMH cranes. Through its subsidiaries MMH has local operations in Canada, Mexico and Chile.
A live webcast of Pekka Lundmark’s presentation today on 7 June 2006 at KCI Konecranes’ Capital Markets Day is scheduled for 10:20 am Helsinki time and can be followed on www.konecranes.com.
KCI Konecranes will report its half year 2006 results on Thursday, 3 August 2006.
Further information can be obtained from
Mr. Pekka Lundmark, President and CEO, tel. +358-20 427 2000
Mr. Teuvo Rintamäki, CFO, tel. + 358-20 427 2040
KCI Konecranes is a world leading crane technology and service-company. Maintenance services are provided for cranes of every make. The product range includes light crane systems, heavy-duty cranes for process industries and shipyards, special harbour cranes for bulk materials and containers as well as reach stackers and lift trucks. In 2005, Group sales totalled EUR 971 million. The Group has over 6,000 employees in 38 countries. KCI Konecranes is listed on the Helsinki Stock Exchange (symbol: KCI1V).
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