MANITOWOC, Wis. -- The Manitowoc Co. Inc. has announced that its board has approved a plan to pursue a separation of the company's crane and foodservice equipment businesses into two independent, publicly traded companies.
The company anticipates effecting the separation through a tax-free spinoff of the foodservice equipment business and expects the spin-off to be completed in first-quarter 2016.
Billionaire investor Carl Icahn recently urged Manitowoc to make just such a split, believing the combined company to be undervalued.
"Manitowoc's management team and our board of directors regularly evaluate and explore opportunities to optimize the company's performance and create value for shareholders," said Glen E. Tellock, chairman and CEO. "Manitowoc has taken and continues to take actions to enhance returns, including margin expansion initiatives, re-investment in our businesses and utilization of our free cash flow to de-lever our balance sheet. We believe the separation of Cranes and Foodservice will position these businesses to take advantage of anticipated long-term improvement in demand and other opportunities in their respective markets."
He added, "After a comprehensive evaluation, including a thorough review of the current and projected operating environments for the two segments, we have determined that the Cranes and Foodservice businesses are best-suited to realize their full potential on a standalone basis. … The board believes that this action is in the best interest of the company and its shareholders."
The company determined to pursue the separation of the two businesses to position each business to pursue individual strategies as market conditions improve; enable each business to attract a long-term investor base appropriate for the particular operational and financial characteristics of each entity; enable investors to value each company separately; and enhance the flexibility of each business to pursue distinct capital structures and capital allocation strategies to meet the individual needs of each business.
The Foodservice business, which reported annual revenue of $1.6 billion in the 12-month period ended Dec. 31, 2014, is one of the world's leading innovators and manufacturers of commercial foodservice equipment serving the ice, beverage, refrigeration, food prep and cooking needs of restaurants, convenience stores, hotels, hospitals and other institutions. The business has a worldwide network of 120 distributors serving dozens of restaurant chains. The business promotes more than 24 brands, including Manitowoc, Garland, Convotherm, Cleveland, Lincoln, Merrychef, Frymaster, Delfield, Kolpak, Kysor Panel, Servend, Multiplex, KitchenCare, Inducs, Koolaire and Manitowoc Beverage System.
Founded in 1902, Manitowoc is a multi-industry, capital goods manufacturer with 92 manufacturing, distribution and service facilities in 25 countries. The company, based in Manitowoc, Wis., is a leading provider of crawler cranes, tower cranes and mobile cranes for the heavy construction industry. It is also one of the world's leading manufacturers of commercial foodservice equipment, which includes 24 market-leading brands of hot- and cold-focused equipment. In 2014, Manitowoc's revenues totaled $3.9 billion, with approximately half of these revenues generated outside of the United States.
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