Manitowoc Company wins bid for Enodis

By: Charlie Mathews, Herald Times Reporter

MANITOWOC — The Manitowoc Company's $2.7 billion buyout offer for Enodis was the winning bid Monday, as it seeks to acquire the British-based manufacturer of industrial catering equipment.

Carl Laurino, senior vice president and chief financial officer, said Manitowoc's bid of 328 pence ($6.53) per share topped U.S. rival Illinois Tool Works' undisclosed offer in Monday's one-round only auction.

The United Kingdom Takeover Panel supervising the auction received no other bids.

Laurino said Manitowoc Company's offer would go to Enodis shareholders for their approval, probably in July.

"We've had additional time to study and refine our expectation about synergies, and we disclosed today we would expect them to be in excess of $80 million," Laurino said of anticipated additional profitability should the two companies combine.

Laurino said regulatory agencies in the U.K. and U.S. would review the proposed transaction, "including the Department of Justice evaluating anti-trust issues." A news release from the Manitowoc Company states the deal is expected to close by the fourth quarter of this year.

At Manitowoc Company's annual meeting in May, Glen Tellock, president and chief executive officer, spent several minutes explaining the rationale behind the purchase of Enodis, which manufactures fryers, ovens, conveyor toasters, grills, pasta cooking stations and other "hot" equipment.

With Enodis touting a customer lineup including McDonalds, Subway, Yum, Five Guys Burgers and Fries and others in Europe and North America, Tellock expressed the conviction the purchase justified a then-$2 billion price tag.

"Even at the higher price, we believe the strategic benefits of the combination are significant while remaining consistent with the strict financial disciplines that we have adhered to for all our acquisitions," Tellock stated in the company's news release.

Later in May, Illinois Tool Works subsequently topped Manitowoc Company's offer. A revised Manitowoc Company bid leapfrogged Illinois Tool Works, but the offer was not formally presented to Enodis shareholders, prompting the takeover panel's involvement.

Create global leader

Tellock told shareholders Enodis, plus Manitowoc Company, would create a global leader in a wide range of foodservice equipment. He said the company's largest-ever buyout would continue the company's value-enhancing acquisition strategy, which includes adding market-leading global brands.

In 2007, the Manitowoc Company passed the $4 billion in annual net sales mark. Laurino said Monday Enodis' sales, as an independent company, would be approximately $1.6 billion in 2008. Enodis has approximately 6,800 employees and 30 factories in nine countries.

Laurino said Enodis brand names for its different equipment lines would be retained, "like we did with the Potain, and Grove and National" crane manufacturers acquired by Manitowoc Company.

"Obviously, Manitowoc Company bid more than they originally wanted to pay," said George Reis Monday, a Two Rivers investment counselor who closely follows the Lakehore area's only member of the New York Stock Exchange.

"But management feels it is such a strong combination, that (making the acquisition) is worthwhile," Reis said.

The auction result was not disclosed until the close of NYSE trading Monday. Manitowoc Company closed up 68 cents for the day, to $32.87 a share.

Similar to the stock market overall, Manitowoc Company shares are down about 20 percent for the second quarter of 2008.

Reis said the company's decline may be attributed to "guilt by association," with the share value of many heavy equipment manufacturers falling with a down stock market.

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