29.05.2018

Tadano takes stake in Manitex

Japanese crane and aerial lift manufacturer Tadano has acquired a 14.9 percent stake in US boom truck, loader crane and platform manufacturer Manitex.
Tadano has paid $32.6 million for the stake, putting a value on Manitex of almost $219 million.

Tadano says that the investment is part of its “long term goal of becoming the world’s number one Lifting Equipment manufacturer and part of its efforts to further accelerate its globalisation.”

Manitex is arguable the leading manufacturer of boom trucks, but also owns PM loader cranes, Valla pick& carry cranes, Badger specialist and Rough Terrain cranes and Oil & Steel platforms.

A statement from Tadano said: “Through complementary product portfolios, Tadano believes that it will be able to meet a wider range of customers’ needs by working together with Manitex. Tadano and Manitex have agreed to build the relationship through the Investment and promote cooperation such as mutual supply of products, technological collaboration and joint procurement.”

The investment is also expected to increase Manitex revenues, by providing access to the Tadano’s global distribution network, while strengthening its financial base through providing capital to accelerate growth. Manitex will appoint a new director, to be nominated by Tadano, in June.

Manitex reported a 23 percent hike in annual revenues in 2017 to $213.1 million, while pre-tax losses were slightly reduced from $8 million in 2016, to a loss of $7.5 million in 2017. First quarter sales jumped 41 percent to $56.7 million, on a like for like basis, while pre-tax losses were halved to $1.38 million. The company employs 561.

Vertikal Comment

This is a surprising and unexpected move by Tadano, although on reflection it has a certain logic to it.

First impression was that Tadano had paid way over the odds for its stake at $11.19 per share - given that six months ago the shares were languishing at around $8.30 a share. However the shares hit $12 in late March, either due to Tadano’s interest, or more likely the improving revenues, given that the 2017 results were announced around that time.

It is likely that Tadano will get to know the company thoroughly, through its seat on the board and if after a time all looks good, it will bid for a larger stake, leading ultimately to a full takeover. The investment will almost certainly be a positive one for Manitex, which can learn a great deal in terms of product design and quality from Tadano.

Tadano itself has gained significant experience of taking over and transforming a smaller American crane company, through the lessons learnt over the past nine years since it acquired telescopic crawler crane manufacturer Spandeck Mantis.

Tadano does not rush its strategic moves, so it will be interesting to see how this relationship develops over the next two years. A good deal will depend initially on the Tadano representative on the Manitex board. One thought is that it will be Tadano America president Ingo Schiller - which coudl work very well, as long as he has sufficient 'pull' with key executives at Tadano HQ in Japan to make things that - require their participation - happen.