Sunday, June 3, 2018

Manitex Adds A Strategic Partner

When writing about Manitex (MNTX), a small American manufacturer of boom truck cranes, knuckle-boom cranes, and other lifting equipment, I’ve often mentioned Tadano (6395.T) (OTC:TDNOF) as a peer/comparable, although Tadano and Manitex have relatively little direct overlap (some in rough terrain cranes and truck-mounted cranes). Now, these two companies will be even more closely tied together, as they announced a tie-up on Friday, May 25, that will see Tadano take a nearly 15% equity stake in the company.

Although the terms of the deal suggest to me that it’s slightly dilutive in the near term, Tadano’s investment should allow Manitex to retire a meaningful portion of its debt (perhaps around a third), reducing its operating risk and saving some interest expense, as well as help the company operationally. It could also, perhaps, be prelude to an eventual acquisition by Tadano. Although Manitex shares are no longer exceptionally cheap, there is still some upside here, particularly if Manitex can make faster progress growing its PM Group knuckle-boom crane business.

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Manitex Adds A Strategic Partner

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