NEWS RELEASE
5875 Landerbrook Drive l Cleveland, Ohio 44124-4069 Tel. (440) 449-9600 l Fax (440) 449-9577
FOR FURTHER INFORMATION, | |
Christina Kmetko | For Immediate Release |
(440) 229-5168 | Friday, June 1, 2018 |
HYSTER-YALE MATERIALS HANDLING,INC.
COMPLETES ACQUISITION OF CONTROLLING INTEREST IN
ZHEJIANG MAXIMAL FORKLIFT CO., LTD.
Cleveland, Ohio, June 1, 2018 - Hyster-Yale Materials Handling, Inc. (NYSE: HY) announced today that it has completed its acquisition of 75 percent of the outstanding shares of, and a controlling interest in, Zhejiang Maximal Forklift Co., Ltd., from KNSN Pipe & Pile Company Limited for an aggregate purchase price of $90 million, funded using Hyster-Yale’s cash on hand. As a result of the acquisition, Zhejiang Maximal Forklift Co., Ltd. has been renamed Hyster-Yale Maximal Forklift (Zhejiang) Co., Ltd. (“HY Maximal”). Current Zhejiang Maximal Forklift (“Maximal”) senior management, through Y-C Hong Kong Holding Company Limited, own the remaining 25 percent interest in HY Maximal.
As previously announced, this transaction is a strategic action that is expected to expand the Company’s low-cost, global manufacturing capabilities, develop access to competitive component sourcing, further strengthen Hyster-Yale’s utility and standard product portfolio by adding a wider spectrum of products to an already leading global materials handling business, and enhance the Company’s presence in the growing global utility and standard market segments, as well as in the China market.
In its local statutory reports, Maximal reported revenues of RMB 528 million, or approximately
$77 million, and generated an approximately 4% operating profit margin on combined domestic and export volume of nearly 7,000 units for the year ended December 31, 2017. Due to the investments that Hyster-Yale intends to make in the joint venture, the proposed acquisition, while currently profitable, is expected to be dilutive to the Company’s earnings over the next year by $5 million to $10 million pre-tax due to additional investments in expense and capital needed to implement the Company’s integration plan. In addition to these expenditures and investments, a one-time incentive- based payment of up to $10 million may become payable by the third anniversary of the closing upon the satisfaction of certain performance conditions. The acquisition is expected to be accretive to Hyster-Yale’s earnings during 2020 under conservative market share and synergy objectives.
Following today’s closing, HY Maximal will be structured as a separate legal entity, with its own management team led by Mr. Lu JinHong, and its own Board of Directors led by Colin Wilson, President and Chief Executive Officer of Hyster-Yale Group, as Chairman. However, HY Maximal will be managed as a division of the Company’s JAPIC segment, reporting to JAPIC senior management, and its results will be consolidated within the Lift Truck JAPIC segment financials.
About Hyster-Yale Materials Handling, Inc.
Hyster-Yale Materials Handling, Inc., headquartered in Cleveland, Ohio, offers a broad array of solutions to meet the specific materials handling needs of customers’ applications. The Company's wholly owned operating subsidiary, Hyster-Yale Group, Inc., designs, engineers, manufactures, sells and services a comprehensive line of lift trucks and aftermarket parts marketed globally primarily under the Hyster® and Yale® brand names. Subsidiaries of Hyster-Yale Group include Nuvera Fuel Cells, LLC, an alternative-power technology company focused on fuel cell stacks and engines, and Bolzoni S.p.A., a leading worldwide producer of attachments, forks and lift tables marketed under the Bolzoni®, Auramo® and Meyer® brand names. For more information about Hyster-Yale Materials Handling, Inc. and its subsidiaries visit the Company's websites at www.hyster-yale.com and www.bolzonigroup.com.
About Zhejiang Maximal Forklift Co., Ltd.
Founded in 2006, Zhejiang Maximal Forklift Co., Ltd. is a Chinese OEM for utility and standard lift trucks and specialized material handling equipment involved in the design, manufacture, service and distribution of Class 1 electric and Class 5 internal combustion engine counterbalance utility and standard platforms, and Class 2 and Class 3 electric warehouse products for both the local China and global markets under the Maximal and SAMUK brands. Maximal also designs and produces specialized products in the Port Equipment and Rough Terrain forklift segments. For more information about Zhejiang Maximal Forklift Co., Ltd. visit the company’s website at www.maxforklift.com.
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Forward-looking Statements Disclaimer
The statements contained in this news release that are not historical facts are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are made subject to certain risks and uncertainties, which could cause actual results to differ materially from those presented. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Among the factors that could cause plans, actions and results to differ materially from current expectations are, without limitation: (1) reduction in demand for lift trucks, attachments and related aftermarket parts and service on a global basis, (2) delays in delivery or increases in costs, including transportation costs or the imposition of tariffs, of raw materials or sourced products and labor or changes in or unavailability of quality suppliers, (3) the successful commercialization of Nuvera's technology, (4) the ability of dealers, suppliers and end-users to obtain financing at reasonable rates, or at all, as a result of current economic and market conditions, (5) the political and economic uncertainties in the countries where the Company does business, (6) customer acceptance of pricing, (7) exchange rate fluctuations and monetary policies and other changes in the regulatory climate in the countries in which the Company operates and/or sells products, (8) delays in manufacturing and delivery schedules, (9) bankruptcy of or loss of major dealers, retail customers or suppliers, (10) customer acceptance of, changes in the costs of, or delays in the development of new products, (11) introduction of new products by, or more favorable product pricing offered by, competitors, (12) product liability or other litigation, warranty claims or returns of products, (13) the effectiveness of the cost reduction programs implemented globally, including the successful implementation of procurement and sourcing initiatives, (14) changes mandated by federal, state and other regulation, including tax, health, safety or environmental legislation, (15) unfavorable effects of geopolitical and legislative developments on global operations, including without limitation, the United Kingdom's exit from the European Union, the entry into new trade agreements and the imposition of tariffs and/or economic sanctions, (16) conditions affecting the industries in which Hyster-Yale or Maximal operate may change, (17) Hyster-Yale may not be able to successfully integrate Maximal’s operations and employees, and (18) the possibility that the final impact of the U.S. Tax Cuts and Jobs Act on the 2018 financial results could be more unfavorable than the provisional amount reported in the 2017 fourth quarter financial results.
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