04.10.2004

Amquip make a bid for Maxim

In a surprise move late last week, Albert C.Bove, president of Maxim Crane Works, (previously Anthony crane rental) which filed for protection under chapter 11 of the bankruptcy code back in June (see vertikal.net June 23rd) has teamed up with AmQuip the Philadelphia based crane hirer founded and led by Joe Wesley to make an alternative bid for the Maxim business.

The two have filed a motion to allow them to file a competing plan of reorganization; the court and the creditors of Maxim must then decide which plan will provide the highest payout both now and in the longer term.

Maxim had filed a pre-negotiated plan which apparently meant that they had the advance agreement of most interested parties for the reorganisation plan which was to swap debt for equity for most of the secured creditors. The filing was presented as almost a done deal with an exit predicted for late summer. Clearly it has not been as straightforward as anticipated.

Competitive plans of reorganisation are relatively rare in such cases, as the management and previous owner have a period of exclusivity during which they usually secure a general understanding and agreement with creditors. The field is then opened up and all potentially interested parties are invited to make a competitive plan, which usually means an offer to take over the business via a purchase through an auction process which will produce more money now in lieu of “jam tomorrow”.

Such offers are also rare as the time limit for alternative proposals is limited and the outsider must usually compete with insiders.

In this case though the man leading the original plan has now backed the competitive plan, this effectively “throwing cold water” on the original.

Bove, who has been with Anthony Crane (now Maxim) for 30 years, said "if the sale to AmQuip occurs, Maxim Crane will once again be run by crane people, rather than accountants, lawyers and MBA's. I know from the very depths of my heart that this is the only way the Company can be saved." These comments refer to the period from1998 when Anthony was acquired by Bain capital and then highly leveraged prior to its failure in June

Bove now believes that "if the Company's Plan (the original Maxim plan) is confirmed, the Company will fail again and will be forced to close the doors and liquidate." Bove says he is concerned, "this could be just like US Airways, back in Bankruptcy within 18 months because we did not have the right plan."

This is a very different tone to his June statement when he said "Once the restructuring plan is fully implemented, Maxim will have the strongest balance sheet in the industry,"

AmQuip which likes to be known as "The Crane People" was founded by CEO Joseph L. Wesley in 1967 when he mortgaged his house to buy a 25 ton Grove crane. Today Amquip runs a fleet of around 650 cranes, ranging in size from a 6-ton industrial crane up to 500-ton All terrain and crawler cranes.

Wesley adds, "I have been a crane operator since I was 15 year old. Relying on the lessons in discipline and teamwork I received in the Marine Corps, I am certain that Al and I can rebuild Anthony Crane to its former prominence." AmQuip is confident that with its current management team and Al Bove, ACR can be integrated into AmQuip to restore ACR to the prominent level it once held.

The combined Amquip/Maxim fleet would have in the region of 2,300 cranes and 1,000 aerial lifts operating from around 50 locations.

Under the Bove/AmQuip Plan, the company assets will be sold at auction to the highest bidder, AmQuip Corporation will act as the “stalking horse bidder”. After confirmation of the Bove/AmQuip Plan a hearing on the proposed sale and auction will take place within thirty (30) days. Closing will occur within eleven (11) days of court approval of the Sale. The auction is the legal procedure that must be followed in order to purchase the assets while a company is still in bankruptcy in order to ensure that the creditors receive the best price. AmQuip would in effect be purchasing the assets as a result of being the successful bidder in the bankruptcy auction.