Combination of Two Highly Complementary
Businesses to Create a Global Leader in Lifting & Material
Handling Solutions
- Creates an industry leader with
expected $10.0 billion in pro forma 2014 revenue
- Results in a stronger more
competitive global lifting and material handling company
- Expected to be accretive to both
companies' shareholders in first full year
- Identified annual after-tax
synergies of at least $119 million
- New Company plans to authorize a
$1.5 billion share repurchase and initial annual dividend of
approximately $1.15 per share
Terex Corporation (NYSE:TEX) ("Terex") and Konecranes Plc
(Helsinki: KCR1V.HE) ("Konecranes") today jointly announced that
their respective Boards of Directors have unanimously approved a
definitive business combination agreement and the resulting
all-stock merger of equals.
Konecranes and Terex will combine to create a single company
with estimated pro forma 2014 revenues and EBITDA of $10.0 billion
and $845 million, respectively. Upon completion of the transaction,
Terex shareholders will own approximately 60% of the combined
company and Konecranes shareholders will own approximately 40%. The
new company will be named Konecranes Terex Plc and will be
incorporated in Finland.
Compelling Strategic
Rationale
The combination will bring together two complementary leaders in
cranes, materials handling, and equipment servicing solutions to
create a premier industrial company. The combined company is
expected to create enhanced shareholder value in a variety of ways,
among them:
- Increased global scale with enhanced
competitiveness to rival low-cost emerging market players;
- Broader presence in key sectors with
greater opportunity to capitalize on growth trends in the port and
industrial sectors as well as services;
- More robust portfolio of complementary
products and customer solutions;
- Critical scale for further technology
development and enhanced R&D
- Significant operational and corporate
synergies and complimentary geographic profiles; and
- Strong balance sheet and cash flow
generation to support growth and return of capital to
shareholders
Terex CEO Ron DeFeo commented “This merger brings together two
great businesses and through synergies provides another lever that
is within our control to deliver value-creation to both the
shareholders of Terex and Konecranes. We have a deep respect for
Konecranes and look forward to joining forces with them to build a
stronger and more diverse company that will be in an excellent
position to succeed in a dynamic and highly competitive global
industry.”
"The combination of Konecranes and Terex is a defining step in
the history of both companies," added Stig Gustavson, Chairman of
Konecranes. "With a focus on Lifting and Material Handling
solutions, Konecranes Terex will be in an excellent position to
deliver enhanced growth in revenue and margins through several
strategic advantages, including significant cross-selling
opportunities. There is a common culture between the two
organizations, with both companies having long histories of
designing competitive and innovative solutions. Together, we will
have the opportunity to expand what Konecranes and Terex have built
and become even stronger in the future."
Governance and
Management
Upon close of the transaction, the combined company will appoint
nine Directors comprised of five Terex Directors and four
Konecranes Directors. The Konecranes Chairman and the Terex CEO
will become, respectively, the Chairman and the CEO of the combined
company at closing. The combined company will maintain significant
headquarters in Westport, Connecticut USA and Hyvinkää, Finland.
Following completion of the transaction, Konecranes Terex Plc is
expected to have approximately 32,000 employees worldwide. The
combined company is planned to be listed on Nasdaq Helsinki and New
York Stock Exchange.
Approvals and Timing
The transaction is subject to approval by Terex shareholders, by
Konecranes shareholders, regulatory approvals and customary closing
conditions. Closing is expected to occur during the first half of
2016.
Conference Call
Terex Corporation and Konecranes Plc will be hosting a
conference call at 8:30 am Eastern on Tuesday, August 11 2015 to
provide an overview of the transaction and answer analysts’
questions.
Investors in North America can access the call by dialing
877-726-6603. For investors outside of North American can access
the call by dialing 706-634-5517. No passcode will be required;
referencing the Terex Konecranes call will be sufficient. The
conference call also will be available live on the company’s
website at www.Terex.com. Please log-in or dial-in at least 10
minutes prior to the start time to ensure a connection.
Advisors
Credit Suisse Securities (USA) LLC is serving as exclusive
financial advisor to Terex and Fried Frank Harris Shriver &
Jacobson LLP, Bryan Cave LLP and Avance Attorneys Ltd are acting as
legal counsel to Terex. Perella Weinberg Partners is serving as
financial advisor to Konecranes and Skadden, Arps, Slate, Meagher
& Flom LLP and Roschier, Attorneys Ltd. are providing legal
counsel to Konecranes.
About Konecranes
Konecranes is a world-leading group of Lifting BusinessesTM,
serving a broad range of customers, including manufacturing and
process industries, shipyards, ports and terminals. Konecranes
provides productivity-enhancing lifting solutions as well as
services for lifting equipment and machine tools of all makes. In
2014, Group sales totaled $2.7 billion. The Group has approximately
12,000 employees at 626 locations in 48 countries. Konecranes is
listed on the NASDAQ OMX Helsinki (symbol: KCR1V).
About Terex
Terex Corporation is a diversified global manufacturer reporting
in five business segments: Aerial Work Platforms, Construction,
Cranes, Material Handling & Port Solutions and Materials
Processing. Terex manufactures a broad range of equipment for use
in various industries, including the construction, infrastructure,
quarrying, manufacturing, mining, shipping, transportation,
refining, energy and utility industries. Terex offers financial
products and services to assist in the acquisition of Terex
equipment through Terex Financial Services. Terex uses its website
(www.Terex.com) and its Facebook page
(www.facebook.com/TerexCorporation) to make information available
to its investors and the market.
Important Information For Investors And Shareholders
This document does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. In connection with the proposed transaction
between Terex and Konecranes, Terex and Konecranes will file
relevant materials with the Securities and Exchange Commission (the
“SEC”), including a Konecranes registration statement on Form F-4
that will include a proxy statement of Terex that also constitutes
a prospectus of Konecranes, and a definitive proxy
statement/prospectus will be mailed to stockholders of Terex.
INVESTORS AND SECURITY HOLDERS OF TEREX ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT WILL BE FILED WITH
THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and
security holders will be able to obtain free copies of the
registration statement and the proxy statement/prospectus (when
available) and other documents filed with the SEC by Terex or
Konecranes through the website maintained by the SEC at
http://www.sec.gov. Copies of the documents filed with the SEC by
Terex will be available free of charge on Terex’s internet website
at www.Terex.com.
Terex, its directors and certain of its executive officers may
be considered participants in the solicitation of proxies in
connection with the proposed transaction. Information about the
directors and executive officers of Terex is set forth in its proxy
statement for its 2015 annual meeting of stockholders, which was
filed with the SEC on April 1, 2015. Other information regarding
the participants in the proxy solicitations and a description of
their direct and indirect interests, by security holdings or
otherwise, will be contained in the proxy statement/prospectus and
other relevant materials to be filed with the SEC when they become
available.
Forward Looking
Statements
This press release contains forward-looking information based on
the current expectations of Terex Corporation. Because
forward-looking statements involve risks and uncertainties, actual
results could differ materially. Such risks and uncertainties, many
of which are beyond the control of Terex, include those factors
that are more specifically set forth in the public filings of Terex
with the Securities and Exchange Commission. Actual events or the
actual future results of Terex and Konecranes may differ materially
from any forward looking statement due to those and other risks,
uncertainties and significant factors. The forward-looking
statements speak only as of the date of this press release.
Terex expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any forward-looking
statement included in this press release to reflect any changes in
expectations with regard thereto or any changes in events,
conditions, or circumstances on which any such statement is
based.
APPENDIX 1: PRELIMINARY COMBINED FINANCIAL
INFORMATION
The unaudited financial information presented below is based on
adjusted figures from Konecranes’ IFRS-based and Terex’s US
GAAP-based audited financial statements for the full year 2013 and
2014 as such without adjusting them in any way to represent uniform
accounting principles.
The combined financial information is for illustrative purposes
only. The combined financial information gives an indication of the
combined company’s sales and earnings assuming the activities were
included in the same company from the beginning of each period. The
combined financial information is based on a hypothetical situation
and should not be viewed as pro forma financial information as
purchase price allocation, differences in accounting standards,
differences in accounting principles and transaction costs have not
been taken into account. The combined financial information assumes
the transaction to be treated as reverse acquisition for accounting
purposes. The difference between transaction value, which has been
calculated based on the closing price of Konecranes’ shares as of
August 7, 2015 and Konecranes’ book equity has been allocated to
non-current assets. The expected synergies have not been
included.
For the purposes of financial reporting, the actual combined
financials will, however, be determined on the basis of IFRS and/or
US GAAP, applied consistently, and will be calculated based on the
transaction value and the fair values of the identifiable assets
and liabilities at the closing date of the company that is
ultimately determined to be treated as acquired entity for
accounting purposes. Income statement and balance sheet items could
therefore differ significantly from the combined financial
information presented below.
This stock exchange release also contains non-GAAP measures
(GAAP being IFRS for Konecranes and US GAAP for Terex). These
non-GAAP measures may not be comparable to similarly titled
measures disclosed by other companies. The non-GAAP measures of
Konecranes and Terex may not be comparable. For a reconciliation
between reported and non-GAAP/adjusted information for Terex please
see the reports and presentations for Q4 2014 and Full Year
2014.
Combined statement of income (reported adjusted numbers for
continuing operations) and statement of cash flow information for
illustrative purposes. No adjustments made to align the accounting
principles.
2014 2013
USD million
Combined Company
Konecranes Adjusted
Terex Adjusted
Combined Company
Konecranes Adjusted
Terex Adjusted
Net Sales
9,981.0 2,672.1 7,308.9
9,872.0 2,788.0 7,084.0 EBITDA
(2) 845.0 215.5 629.5 828.4 205.3
623.1 D&A (1) (205.3) (57.3) (148.0)
(194.9) (51.9) (143.0)
EBIT (2)
639.7 158.2 481.5
633.5 153.4 480.1
FinancialItems
(131.6) (11.2) (120.4) (130.5) (12.0)
(118.5) Taxes (2) (137.0) (44.9) (92.1)
(154.4) (48.9) (105.5)
NonControllingInterest
(0.5) - (0.5) 5.1 - 5.1
NetIncome
370.6 102.1 268.5
353.7 92.5 261.2
Net cashfromoperating
607.8 197.1 410.7 348.2 159.7
188.5
Capitalexpenditure
(137.3) (55.8) (81.5) (159.5) (76.7)
(82.8)
Average EUR/USD rates of 1.329 and 1.328 have been used for 2014
and 2013 respectively.
Combined balance sheet for illustrative purposes. No adjustments
made to align the accounting principles.
12/31/2014
12/31/2013
USDmillion
Combined Company
Konecranes Adjusted
Terex Adjusted
Combined Company
Konecranes Adjusted
Terex Adjusted
Non currentassets
4,457.5 607.5 2,571.8 4,773.5
665.7 2,897.3 Inventories 1,868.2 407.3
1,460.9 2,062.1 448.9 1,613.2
Othercurrentassets
2,077.0 659.9 1,417.1 2,365.0
746.9 1,618.1 Cash 597.1 118.9 478.2
590.4 182.3 408.1
TotalAssets
8,999.8 1,793.7 5,928.0
9,791.1 2,043.9 6,536.7
TotalEquity
3,862.7 545.4 2,039.1 4,038.4
613.0 2,214.8
Non currentliabilities
2,589.4 343.6 2,245.8 2,916.4
319.2 2,597.2
Currentliabilities
2,547.7 904.6 1,643.1 2,836.4
1,111.7 1,724.7
Total Equity
andliabilities
8,999.8 1,793.7 5,928.0
9,791.1 2,043.9 6,536.7
Interest-bearingdebt
2,089.2 300.4 1,788.8 2,417.6
440.9 1,976.7
Interest-bearing netdebt
1,492.1 181.5 1,310.6 1,826.8
258.2 1,568.6
Year-end EUR/USD rates of 1.214 and 1.379 have been used for
2014 and 2013 respectively.
(1) D&A for Terex includes depreciation, amortization, and
bank fee amortization not included in Income (loss) from
operations.(2) Konecranes adjusted EBITDA excludes restructuring
costs of $4.3 million in 2014 and $18.7 million in 2013 compared to
the corresponding IFRS statement of income. Adjusted EBIT excludes
restructuring costs of $4.3 million in 2014 and $41.0 million in
2013. The tax effect of the excluded restructuring items have
increased taxes by $1.3 million in 2014 and $14.2 million in 2013
compared to the IFRS statement of income.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150810006447/en/
Terex CorporationTom Gelston, 203-222-5943Vice President
Investor Relationsthomas.gelston@terex.com
Terex (NYSE:TEX)
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