MANITOWOC, Wis. -- The Manitowoc Co. Inc. has completed its acquisition of Enodis plc, a global leader in the design and manufacture of equipment for the commercial foodservice industry. The $2.7 billion acquisition will establish Manitowoc among the world's top manufacturers of commercial foodservice equipment.
The integration of the Manitowoc and Enodis foodservice businesses will create a platform for global growth, Manitowoc said. With capabilities that span refrigeration, ice-making, cooking, food preparation and beverage dispensing technologies, Manitowoc will be able to equip entire [image-nocss] commercial kitchens and serve growing demand for food prepared away from home.
"Given the experience that we gained in prior acquisitions, we will use a consistent approach in integrating Enodis and Manitowoc," said Glen E. Tellock, president and CEO. "Teams consisting of Manitowoc and Enodis leaders are jointly focused on creating profitable growth driven by an emphasis on new-product development and process innovations."
He added, "We believe that our expanded product line and broad-based manufacturing capabilities will enable Manitowoc's Foodservice segment to grow and succeed, even in a diverse global marketplace. Consistent with our expectations, we believe that the Enodis acquisition will be EPS accretive in 2009, while achieving $80 million of annual synergies and generating positive EVA by 2011."
Due to currency hedges for the Enodis purchase price, Manitowoc's third-quarter results will include the recognition of a loss of $198.4 million before taxes (99 cents per diluted share). This hedging loss reflects accounting treatment of hedges for the purchase price of Enodis that was employed to remove the currency risk inherent in Manitowoc's Great British Pound offer for Enodis. Manitowoc's credit commitment required that 80% of the purchase price of Enodis be hedged by July 30, 2008. Given the significant reduction in the Great British Pound to U.S. dollar exchange rate that has since occurred, the accounting treatment for the hedges put in place take the form of a mark-to-market loss. This is a one-time, non-cash loss that effectively capped the U.S. dollar cost of Enodis at a more favorable exchange rate than was anticipated when Manitowoc announced its bid for Enodis. Additionally, the accounting treatment of this hedge will lower the initial amount of goodwill booked for the acquisition by $198.4 million as of Sept. 30, 2008. The final disposition of this hedge position will be determined based upon the market exchange rate on the date the transaction is funded which is expected to be Nov. 7, 2008.
London-based Enodis is a global company focused on the design, manufacture and supply of food and beverage equipment. Through its two operating groups, Global Food Service Equipment and Food Retail Equipment, it has manufacturing facilities in North America, the United Kingdom, Western Europe and Asia and a large portfolio of premium brands including Cleveland, Convotherm, Delfield, Frymaster, Garland, Icematic, Ice-o-matic, Jackson, Kysor//Warren, Kysor Panel Systems, Lincoln, Merrychef, Scotsman and Scotsman Beverage Systems.
Manitowoc, Wis.-based Manitowoc Co. is a diversified, multi-industry, capital goods manufacturer. It is one of the world's leading innovators and manufacturers of commercial foodservice equipment serving the ice, beverage, refrigeration, food preparation and cooking needs of restaurants, convenience stores, hotels, healthcare, and institutional applications.
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