The Manitowoc Co. board of directors has approved a plan to separate the company's crane and foodservice businesses into two independent, publicly-traded companies.
Manitowoc anticipates making the separation through a tax-free spin-off of the foodservice business, and expects the spin-off to be completed in the first quarter of 2016.
“Manitowoc has taken and continues to take actions to enhance returns, including margin expansion initiatives, reinvestment in our businesses, and utilization of our free cash flow to de-lever our balance sheet," said Glen Tellock, chairman and CEO. "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.”
The Cranes business reported an annual revenue of $2.3 billion in the 12 months ended Dec. 31, 2014. The business operates 37 facilities in 18 countries and generates nearly 60% of its revenue from non-U.S. markets.
The Foodservice business reported annual revenue of $1.6 billion in the 12 months ended Dec.31, 2014. The business has a worldwide network of 120 distributors serving dozens of restaurant chains. It has a global presence that spans five continents and more than 80 countries.
Manitowoc determined to pursue the separation of the two businesses in order to:
Manitowoc expects to continue to execute its stated strategy and capital allocation plans as management works through the separation, resulting in further de-leveraging from now until the transaction is completed. As a result, Manitowoc expects each independent company to have a capital structure and credit rating consistent with that of Manitowoc today.
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