BUFFALO, N.Y.–(BUSINESS WIRE)–Columbus McKinnon Corporation (Nasdaq: CMCO), a leading designer, manufacturer and marketer of intelligent motion solutions for material handling, today announced that the Company has executed a definitive agreement to acquire montratec GmbH, a leading automation solutions company that designs and develops intelligent automation and transport systems for interlinking industrial production and logistics processes. montratec provides its modular, intelligent monorail transport systems for the electric vehicle (EV), semiconductor, electronics, life sciences, aerospace and other industries.
David J. Wilson, President and CEO of Columbus McKinnon, commented, “montratec is an ideal complement to our precision conveyance platform adding asynchronous technology for material transport solutions that accelerates our growth in very attractive markets with strong secular tailwinds. montratec’s solutions are at the heart of process automation in manufacturing, enhancing our precision conveying platform. Their technology advances our intelligent motion offering, expands market access and increases our value proposition. We plan to realize significant sales synergies as we leverage their conveying technology through our existing channels in the U.S. and their solid foundation in Europe to expand our global precision conveyance market share.”
Mr. Wilson also noted, “This acquisition is an excellent demonstration of our strategy to drive growth with stronger earnings power and further catalyzes the transformation of Columbus McKinnon as a leading intelligent motion solutions provider for material handling.”
High Value-Add Technology for Production Process Automation
montratec’s intralogistics solutions for manufacturing, assembly and production processes minimize cycle times and maximize operational throughput for customers. Intelligent automation and transport systems are the centerpiece for networking industrial production and logistics processes by enabling complex internal transport operations that support faster, more efficient assembly processes. Asynchronous movement enables products to be moved independently in multiple directions at varying speeds to balance production lines, increasing flexibility and productivity. montratec also brings a higher level of cleanroom certification that expands market access in the EV, life sciences, electronics and semiconductor verticals. Their monorail systems interlink production processes between robots, other processing equipment and workspaces, more flexibly creating intelligent process sequencing to boost the automation of complete production lines. Importantly, their monorail and shuttle/transport solutions can be configured for a variety of production needs from low volume/high mix to high volume/high speed. In addition, montratec’s solutions reduce energy costs and floor space requirements.
Multiple Strategic Benefits
montratec provides multiple strategic benefits to Columbus McKinnon including:
- Accelerates growth in markets with strong secular tailwinds, including electric vehicles, life sciences, electronics and semiconductors
- Advances capabilities up the technology stack with proprietary controls and configurable product offerings for precision conveyance and automation
- Generates significant revenue opportunities with geographic, channel and product cross-selling synergies
- Creates solid foundation to advance growth of precision conveyance platform in Europe with greater scale and strong market recognition
- Adds talented, motivated, and innovative team
Strong Financial Profile with Backlog to Support Over 30% Growth
With approximately $29 million in revenue and 24% adjusted EBITDA margins* in the calendar year ended December 31, 2022, montratec is expected to grow revenue over 30% in 2023.
*Adjusted EBITDA margin is a non-GAAP measure. See accompanying discussion and reconciliation table in this release regarding the reconciliation of net income to adjusted EBITDA.
Transaction and Closing Details
The all-cash transaction is valued at approximately $110 million at closing using current exchange rates plus an earnout in an amount expected not to exceed $14 million based on EBITDA performance. The transaction is expected to close by May 31, 2023, subject to typical customary closing conditions.
- Purchase price represents 13.0x 2023 expected adjusted EBITDA without synergies or 11.4x with projected synergies
- Sources of cash to fund the acquisition are expected to include expanding the existing revolver from $100 million to $175 million as well as securitizing $50 million in accounts receivable
- Expect net leverage ratio on a financial covenant basis of 2.2x at March 31, 2023 moving to 2.7x following the closing of the acquisition
Greg Rustowicz, Executive Vice President and Chief Financial Officer of Columbus McKinnon, noted, “Our measurable cash generation, flexible balance sheet and strong liquidity enable us to finance this bolt-on acquisition at a reasonable cost in today’s credit environment. Importantly, post-acquisition our leverage ratio is comfortably below 3.0x, and we expect we will demonstrate yet again our ability to quickly de-lever to our targeted leverage ratio.”
Estimated Preliminary Fourth Quarter 2023 Financial Results1
- Preliminary, unaudited fourth quarter revenue expected to be approximately $253 million, surpassing guidance range of $240 million to $250 million
- Expect fourth quarter GAAP operating income in the range of $27 million to $28 million
- Expect fourth quarter adjusted EBITDA2 in the range of $39 million to $40 million
Mr. Rustowicz concluded, “Our preliminary fourth quarter results validate our success with driving growth, strengthening earnings power, generating cash and reducing debt.”
1The unaudited estimated financial results are preliminary and subject to revision based upon the completion of the Company’s quarter-end financial closing processes and its fiscal year-end audit. As a result, the Company’s actual results for the three months ended March 31, 2023 may differ materially from the estimated preliminary unaudited financial results upon the completion of the Company’s financial closing procedures, as a result of the fiscal year-end audit, or upon occurrence of other developments that may arise prior to the time its financial results are finalized. In addition, the Company’s independent registered public accounting firm does not express an opinion or any other form of assurance with respect to these estimated preliminary results. Additional information and disclosures would be required for a more complete understanding of the Company’s financial position and results of operations as of, and for the period ended on, March 31, 2023.
2Adjusted EBITDA, and adjusted EBITDA margin are non-GAAP financial measures. See accompanying discussion and reconciliation table in this release regarding the reconciliation of GAAP operating income to adjusted EBITDA.
About Columbus McKinnon
Columbus McKinnon is a leading worldwide designer, manufacturer and marketer of intelligent motion solutions that move the world forward and improve lives by efficiently and ergonomically moving, lifting, positioning and securing materials. Key products include hoists, crane components, precision conveyor systems, rigging tools, light rail workstations and digital power and motion control systems. The Company is focused on commercial and industrial applications that require the safety and quality provided by its superior design and engineering know-how. Comprehensive information on Columbus McKinnon is available at www.columbusmckinnon.com.
