Since the last issue of HOIST was published, KCI Konecranes of Finland has taken over two more companies in the USA.
On 5 March it picked up the assets of the hoist and crane business of Shepard Niles, Inc of Montour Falls, New York, USA at an auction in the US Bankruptcy Court in Rochester, New York. The deal does not include Cleveland Tramrail (see box story below Gorbel takes…).
Then on 3 June Konecranes bought Massachusetts-based Burlington Engineering from Interstate Electric Corporation.
KCI Konecranes claimed that these deals, together with its 1998 acquisition of Pennsylvania-based Overhead Crane Service, Inc, made it the market leader in the northeastern USA.
KCI Konecranes’ main interest in both companies is the after-market services and parts business. Shepard Niles has a large installed base of overhead travelling cranes as the company has a 100-year history of crane production. Konecranes said that “depending on the results of an environmental study of the facilities” it would operate out of the existing Shepard Niles office and retain those employees associated with that part of the business.
The total consideration payable consists mainly of $975,000 in accounts receivable and $2.17m in inventory and intangible assets including the trade name and trade marks, engineering drawings, customer records etc.
Annual sales of replacement parts are $5m. An additional $500,000 of sales comes from other aftermarket activities including service, in-house repair and field modernisations.
The Finnish-designed hoists that are assembled in Springfield, Ohio and sold in North America with the R&M brand as well as the Konecranes brand are now also being sold with Shepard Niles branding through Shepard Niles’ distribution channels. It is estimated that an incremental $2m in sales will result from these products by the second year of operation, said Konecranes.
It is understood that Konecranes outbid other parties that offered to continue Shepard Niles’s operations in Montour Falls NY USA.
Burlington Engineering had annual sales of $6.5m, about evenly split between industrial cranes and maintenance services. Burlington Engineering produces 50 to 60 cranes a year resulting in $2.5m to $3m in sales. Service sales in 2001 were $3.5m. The division has 35 employees.
KCI Konecranes said that it expects to put about $1m-worth of its own components through Burlington each year. Burlington Engineering will be managed as part of the Crane Pro Services organisation and becomes the 54th branch operation in the USA and the 68th in the Americas.
