Hyster-Yale Materials Handling, Inc. Completes Acquisition Of Controlling Interest In Zhejiang Maximal Forklift Co., Ltd.
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.
Established in Feb. 2006, Maximal Forklift (Zhejiang) Co., Ltd. is located in Lushan Industry Area with convenient transportation. Maximal specializes in material handling equipment design and manufacture. Maximal Company total floor area is 133,334㎡,investment RMB420 million, factory designed production capacity is 30000 units per year.
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.
Established in Feb. 2006, Maximal Forklift (Zhejiang) Co., Ltd. is located in Lushan Industry Area with convenient transportation. Maximal specializes in material handling equipment design and manufacture. Maximal Company total floor area is 133,334㎡,investment RMB420 million, factory designed production capacity is 30000 units per year.
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.
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