Terex and Konecranes to Combine in an All-Stock Merger
2015-08-11 06:00:00.178 GMT
Terex and Konecranes to Combine in an All-Stock Merger
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
Business Wire
WESTPORT, Conn. & HYVINKAA, Finland -- August 11, 2015
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 Businesses^TM, 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 Konecranes Terex Combined Konecranes Terex
Company Adjusted Adjusted Company Adjusted Adjusted
Net 9,981.0 2,672.1 7,308.9 9,872.0 2,788.0 7,084.0
Sales
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
Financial (131.6) (11.2) (120.4) (130.5) (12.0) (118.5)
Items
Taxes (2) (137.0) (44.9) (92.1) (154.4) (48.9) (105.5)
Non
Controlling (0.5) - (0.5) 5.1 - 5.1
Interest
Net 370.6 102.1 268.5 353.7 92.5 261.2
Income
Net cash
from 607.8 197.1 410.7 348.2 159.7 188.5
operating
Capital (137.3) (55.8) (81.5) (159.5) (76.7) (82.8)
expenditure
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
USD Combined Konecranes Terex Combined Konecranes Terex
million Company Adjusted Adjusted Company Adjusted Adjusted
Non current 4,457.5 607.5 2,571.8 4,773.5 665.7 2,897.3
assets
Inventories 1,868.2 407.3 1,460.9 2,062.1 448.9 1,613.2
Other
current 2,077.0 659.9 1,417.1 2,365.0 746.9 1,618.1
assets
Cash 597.1 118.9 478.2 590.4 182.3 408.1
Total 8,999.8 1,793.7 5,928.0 9,791.1 2,043.9 6,536.7
Assets
Total 3,862.7 545.4 2,039.1 4,038.4 613.0 2,214.8
Equity
Non current 2,589.4 343.6 2,245.8 2,916.4 319.2 2,597.2
liabilities
Current 2,547.7 904.6 1,643.1 2,836.4 1,111.7 1,724.7
liabilities
Total
Equity and 8,999.8 1,793.7 5,928.0 9,791.1 2,043.9 6,536.7
liabilities
Interest-
bearing 2,089.2 300.4 1,788.8 2,417.6 440.9 1,976.7
debt
Interest-
bearing net 1,492.1 181.5 1,310.6 1,826.8 258.2 1,568.6
debt
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/Contact:
Terex Corporation
Tom Gelston, 203-222-5943
Vice President Investor Relations
thomas.gelston@terex.com
-0- Aug/11/2015 06:00 GMT