The acquisition will end the three-year legal wranglings between Morris Material Handling and Konecranes Inc about competition for aftermarket parts, currently scheduled for trial in August. In the case, Konecranes sued for the return of a deposit of $250,000 it paid Morris during the initial stages of a previous acquisition deal that fell through.
Morris Material Handling Inc is based in Oak Creek, Wisconsin and is the licensee of the P&H brand. Annual sales for the company in fiscal year 2005 were approximately $170 million. First half of fiscal year 2006 sales were $102 million, with an operating profit of $5.5 million (5.4% of sales). The company has approximately 980 employees. This information is based on Morris Materials Handling financial update published on May 10, 2006, Konecranes said.
Morris emerged from Chapter 11 bankruptcy protection in 2001.
“Due to the nature of the transaction it has not been possible to conduct a due diligence investigation of the target company,” Konecranes said in a statement. “However, based on Konecranes Inc.’s knowledge of the crane and crane maintenance industries the company has no reason to believe that Morris Materials Handling, Inc.’s general business and financial risk profile would materially deviate from what is typical in the U.S. in this field. Konecranes Inc. intends to explore possibilities to acquire additional shares in MMH Holdings, Inc. The impact of the acquisition on the financial position and operations of KCI Konecranes will be published when the outcome of such exploration allows for any assessments.”
Konecranes acquired the Morris Material Handling business in the UK in January 2005. The acquisition will unite the Morris UK business with its old owners. The Morris UK business was sold off to management in the early 2000s during the US firm’s bankruptcy period.
