Kito Corp, a Japanese crane maker, is hoping to beef up its European presence by bidding for Germany-based Stahl CraneSystems.
Kito, founded in 1932, established a unit in Germany a decade ago but the company has never been able to create a big presence in the EU, the sector’s biggest source of sales. With its fastest-growing market, China, slowing down in recent years, Kito is now looking to expand its European sales via an acquisition.
“To be successful globally for business, the European market is the ultimate goal,” Yoshio Kito, chief executive of the company that his grandfather founded, told the Financial Times.
The opportunity to buy Stahl arose after Finland’s Konecranes announced in May it would pay $1.3bn to acquire a unit of Terex of the US that makes cranes. The European Commission approved the deal in August as long as Konecranes sells Stahl, which it acquired in 2005.
Konecranes and Kito then dissolved a five-year strategic alliance so the Japanese company could be a neutral bidder for Stahl.
Konecranes said it was aiming to finalise the sale of Stahl by the end of the year, adding there was interest from several parties.
Analysts at Danskebank estimated Stahl’s enterprise value at €300m plus. Johan Eliason, analyst at Kepler Cheuvreux, said Stahl’s valuation could be closer to €200m given that it will be a forced divestment, but he added the sale price could be driven up if multiple bidders are involved.
Kito is a global company, with almost two-thirds of its €500m of annual revenue coming from outside Japan, and about half of its manufacturing is located overseas.
But less than 5 per cent of Kito’s revenue is generated in Europe, where competition is intense. “It is quite fragmented, so for foreign players it is difficult,” said Mr Kito.
In the hoist market, he explained, there were metal wire or rope products, which Stahl specialises in, and electric chain models, which Kito makes.
“They are used in different segments and weight classes,” he added. “The idea is to have both, to be complementary to each other.”
Mr Sakairi said he expected “quite a few” private equity firms and some industry players to be interested in buying Stahl, but given their product portfolios and complementary geographies he believed Kito was an ideal match for the German cranemaker.
by: Patrick McGee in Frankfurt
