Timothy T. Tevens, President and CEO of Columbus McKinnon, commented, “We have long viewed STAHL as an ideal complement to Columbus McKinnon EMEA, as well as an excellent expansion of our global product offering. Their strong position with wire rope and electric chain hoists in Europe immediately complements our leadership of handheld hoists in that region, and their broad portfolio of ATEX certified explosion-protected products serving the mining, oil & gas and chemical processing industries significantly extends our global offerings in capability and capacities. Equally important, Columbus McKinnon and STAHL are culturally aligned, as STAHL has a similar go-to-market strategy, produces high quality products and is focused on the total cost of ownership for their customers. They also have strong, established relationships with EPC firms for key end-user solutions.”
Founded in 1876, STAHL has approximately 650 employees that support the manufacturing operation located in Germany and its nine affiliated sales companies around the world. For the trailing twelve-month period ended September 30, 2016, STAHL had total revenue of approximately €155 million (~$166 million) and EBITDA of approximately €29 million (~$31 million), or about 19% of revenue. EBITDA, or earnings before interest, taxes, depreciation and amortization, is a non-GAAP metric typically used in assessing acquisition valuations. Geographically, STAHL revenue is approximately 71% EMEA, 16% Americas and 13% Asia Pacific.
Transaction Details and Financing
The all-cash transaction value for the acquisition is €224 million (~$240 million) with an earn-out potential up to €230 million (~$246 million), if certain earnings goals are met for calendar year 2016. Cost synergies of approximately €5 million (~$5 million) are expected to be realized in Fiscal 2018, growing to approximately €10 million (~$11 million) in Fiscal 2019. Columbus McKinnon estimates one-time transaction related costs in fiscal 2017 between $8.0 million and $9.0 million as well as one-time restructuring costs of €6 million (~$6 million) in fiscal 2018
Financing for the transaction as well as the restructuring of current debt has been committed by J.P. Morgan Chase Bank, N.A. The financing will be structured as senior secured debt up to $570 million including a new $75 million revolver. The borrowings will fund the acquisition, certain fees and expenses incurred in connection with the transaction and repay outstanding balances on the Company’s current revolving credit facility and term loan.
Columbus McKinnon’s acquisition of STAHL is expected to close between January 31, 2017 and April 30, 2017. The closing is subject to European Commission approval, the successful closing of the pending acquisition of certain Terex subsidiaries by Konecranes, and other customary conditions. J.P. Morgan Securities LLC acted as lead financial advisor. Moelis & Company LLC was also a financial advisor to the Company. DLA Piper (Hamburg, Germany and New York City, New York) served as outside counsel on the transaction and financing. Latham and Watkins (Brussels, Belgium and Frankfurt, Germany) handled the regulatory review and filing.