15.06.2007

Arcomet share sale?

40 percent of Arcomet, the Belgian based tower crane company is being put up for sale, according to representatives of the four private equity companies that own the minority stake in Arcomet.

The four financial institutions have insisted on exiting the business. a report in Belgium's The Standard newspaper, says that “given that Dirk Theyskens and family who own 60 percent of the company, is not in a position (or willing?) to purchase the shares” The financiers have appointed an investment bank and legal adviser to dispose of their minority share holding.

Arcomet has said that its revenues for the first half of fiscal 2007 to the end of March, were €55 million and that it expects revenues for fiscal 2007 to be in the region of €115 to €120 million, up 12 to 15 percent on the €103 million it reported for 2006.

In its release, which makes no mention of the independent sharholders action, Arcomet says that it has appointed invesment bank Rothschilds to advise on:-

-Making the most of the new development phase into which it is entering. and:-

-To secure optimal funding so that it can pro-actively lead sector consolidation in the coming three to five years.

At the end of last year Arcomet had a fleet of around 700 self-erectors and 800 top-slewers with a book value of around €175 million.


Vertikal Comment

Given its massive investments in new tower cranes its UK/Ireland start ups and more recent acquisition of Airtek cranes in the UK, one would expect Arcomet to be looking at stronger growth for 2007 than the 12 to 15 percent it is anticipating.

It looks as though the minority shareholders in the business who came in as partners in 2000, when the business was looking overleveraged in a quiet market, now want out!

Most likely they would like to see some decent dividends or at least a return on their invesments, rather than seeing the profits being ploughed back into the company.

With plans to buy yet more cranes and open further outlets it is likely that they can see no end to what must look like a potential roller coaster ride should construction markets slow?

They will also be aware that with an excess of cash from investment funds looking for a home, the timing for a sale is probably as good as it is likely to get. So time for a sharp exit.

Arcomet is certain to be suffering from the eternal problem of a fast growing rental business in that it soaks up cash. The big pay day comes when the business is sold or the expansion stops during a positive part of the business cycle.

Perhaps the ride is getting a little scary for these minority shareholders who are unlikely to have the same appetite for gung-ho expansion as Dirk Theyskens does?