Konecranes has completed the acquisition of Terex Corporation’s material handling and port solutions (MHPS) business segment.
The consideration for the MHPS business is US$595m and €200m (US$212m) in cash and 19,600,000 new class B shares, making Terex a 25% shareholder in Konecranes.
The subscription price for a share is €35.01 (US$37.11) which was the closing price of Konecranes’ class A share on the Nasdaq Helsinki on the date of closing of the deal.
The Finnish manufacturer is targeting synergies of €140m (US$148m) within three years including an expected €35m (US$37m) during 2017.
These synergies will come from “procurement, operations and selling, general and administrative expenses (SG&A)”, it said in a statement.
One-time implementation expenses are expected to be €130m (US$138m), with €60m (US$64m) of capex expected.
Panu Routila, president and CEO of Konecranes, stated: “We want to provide a home for Demag and Port Solutions, from which these businesses can grow and become stronger as part of our joint organisation. The MHPS acquisition makes it possible for us to realise a long list of synergies. We will be one technology company, ready to create the next generation of lifting.”
Konecranes now has three business areas comprising service, industrial equipment and port solutions with the latter being headed by Mika Mahlberg, based in Finland.
The firm’s expanded product portfolio for port customers includes Konecranes Gottwald mobile harbour cranes, Konecranes Noell ship-to-shore (STS) and rubber-tyred gantry (RTG) cranes, horizontal transport for container terminals and Konecranes Liftace lift trucks.
Based on 2015 financials, Konecranes and MHPS had aggregated sales of approximately €3.5bn (US$3.7bn), adjusted EBITDA of €267m (US$283m) and a total workforce of approximately 19,000.
David Sachs and Oren Shaffer from Terex will join the Konecranes board of directors as part of the agreement.
The final cash consideration is subject to post-closing adjustments for cash, debt, working capital and the closing of the sale of the STAHL CraneSystems business.