Hanson to make pounds 400m from crane maker auction
Tuesday 01 July 1997
The sale, which will be conducted through an international auction handled by the Goldman Sachs investment bank, is expected to raise around pounds 400m.
The announcement yesterday followed several informal approaches from potential trade buyers and was made with the intention of flushing out other potential buyers.
It is the latest in a sequence of disposals by Hanson since Lord Hanson reversed the company's long-term acquisition policy in 1995.
Grove Worldwide was acquired as part of the Kidde group of businesses in 1987, but it was not included in the portfolio of American businesses demerged with US Industries two years ago. Hanson's mainstay businesses are in building materials and include ARC, Cornerstone and Hanson Brick.
Grove is the largest US maker of cranes with plants in Pennsylvania and Nebraska and is the market leader in the UK, where it has a manufacturing plant in Sunderland.
It also has plants in France and Germany and employs around 5,000 people world-wide.
Around 60 per cent of sales are in the US, with a further 30 per cent in Europe, Africa and the Middle East. Analysts said Grove's turnover and profits were volatile, as would be expected from a manufacturer of high-priced capital equipment.
It made an operating profit of pounds 48m in the last financial year on a turnover of pounds 529m. That compared with a profit of just pounds 12m on a turnover of pounds 261m in 1994.
In the first six months of the current financial year, however, it reported an operating profit of pounds 20.9m, down 9 per cent on the same period last year. The group blamed a change in the sales mix, aggressive pricing by competitors and currency effects. Hanson, in its demerged state since spinning off Imperial Tobacco and Millennium Chemicals last October, has little debt, however, and the disposal of Grove could help finance new acquisitions for the core business.
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