Konecranes has entered into an agreement to sell Kito manual products while Kito will sell wire rope hoists made by Konecranes, each under their own brands. These are non-exclusive agreements, and the two hoist firms will also jointly examine the possibilities to cooperate in distribution and license manufacturing of other products, as well as in procurement.
Konecranes and Kito intend to transfer the hoist distribution business of Konecranes’ Japanese joint venture MHS Konecranes Co. Ltd to Kito to create, ‘a strong player in the Japanese hoist market’. This will see Konecranes purchase the remaining 35% stake of MHS Konecranes owned by Meidensha Corporation, before selling the full business to Kito. Konecranes will maintain its end-user customer business in Japan as a supplier of cranes and hoist services to local customers.
Access to each other’s regional networks will allow Konecranes and Kito to expand their geographical presence, notably in East Asia and North America for Konecranes, and Europe for Kito.
To reinforce the alliance, Konecranes has entered into an agreement to purchase 22% of the share capital in Kito from international private equity firm The Carlyle Group. This accounts for 29,750 of the shares in Kito through negotiated transaction from funds controlled by The Carlyle Group. The purchase price for the shares in Kito is JPY111,800 per share and the settlement date is 24 March, 2010. The total value of the stake purchased amounts to approximately JPY3.3bn (€27m). The purchase will be financed with existing cash reserves.
The Carlyle Group will participate in a share buyback in Kito for an additional 10% of the Kito share capital. Post the share purchase by Konecranes and the Kito share buyback, Konecranes will have approximately 24.4% of the voting rights in Kito.
Both companies will retain their identities and independence under the alliance, which they said is, ‘based on mutual trust and equal partnership’.
”This alliance will strengthen both companies on the global crane and hoist market and support further profitable growth and market leadership,” said Pekka Lundmark, president and CEO of Konecranes. “The alliance will enable both companies to expand their product offering as well as to improve competitiveness and customer service.”
“We are very pleased and hopeful with this alliance, which is based on mutual respect and equal partnership,” said Yoshio Kito, president and CEO of Kito. “Through this alliance, we together with Konecranes will enhance our market leadership and accelerate our profitable growth by mutual complements in product offering, manufacturing, sales network and customer service.”
