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Manitex International, Inc. MNTX has raked in net $6.2 million by divesting its Load King subsidiary to Utility One Source. The transaction will help the company lower its debt, while it focuses on higher margin core lifting businesses, which remain its main priorities going into 2016. The sale led to a 5% gain in Manitex’s share price.
Utility One Source, founded by private equity funds managed by Blackstone earlier this year, is a single-source supplier for the utility and heavy equipment industries with a focus on sales, rental, parts and installation, equipment customization, remanufacturing and installation, and aftermarket services.
Load King came under the Manitex umbrella six years ago when it was acquired from Genie Industries, Inc., a subsidiary of Terex Corporation TEX for $3.1 million. South Dakota-based Load King Trailers manufactures specialized custom trailers and hauling systems typically used for transporting heavy equipment.
Load King trailers serve niche markets in the commercial construction, railroad, military, and equipment rental industries through a dealer network. Currently, Load King is one of Manitex’s well-known brand names, which include Manitex, PM, O&S, CVS Ferrari, Badger, Liftking, Sabre, and Valla.
Load King’s trailing 12 months revenue was approximately $18.5 million and EBITDA, $0.8 million. The divestiture will result in an estimated after-tax book loss of approximately $1 million. It will be reflected in Maintex’s fourth-quarter 2015 results.
Manitex’s third-quarter 2015 earnings plunged to 1 cent per share from 13 cents in the prior-year quarter due to persistent weakness in the crane boom truck markets. Manitex ended the quarter with cash and cash equivalents of $4.4 million, flat with the end-2014 level. Manitex’s total debt was $195.6 million as of Sep 30, 2015, translating into a debt to capital ratio of 53.37%.
Manitex remains optimistic and prepared for a change in the cycle and product demand. The company also continues to focus on integration and execution of new acquisitions along with the strengthening of its balance sheet. Last month, Manitex’s subsidiary, PM Group opened a subsidiary, PM Middle East, in the Jebel Ali Free Zone in Dubai, fortifying its presence in the region. The expansion of PM into this new region will provide the opportunity to grow the customer base. PM’s growing international presence will help it to cross-sell its products and thereby, drive growth.
Bridgeview, IL-based Manitex is a leading provider of engineered lifting solutions, including boom truck and rough terrain cranes, rough terrain forklifts, special mission oriented vehicles, container handling equipment and specialized trailers.
Manitex currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include EnPro Industries, Inc. NPO and Graham Corporation GHM. Both these stocks carry a Zacks Rank #2 (Buy).
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