Konecranes has entered into an agreement to acquire the Indian crane company WMI Cranes Ltd. (“WMI”). The acquisition marks an important step in strengthening Konecranes’ position in the growing Indian crane market.
The company, which is owned by its Managing Director Mr Gopal Vazirani and his family, is one of the leading manufacturers of heavy-duty cranes in India. WMI has an installed base of over 4,000 cranes in India and it has an extensive sales network throughout the country, which combined with Konecranes’ vast service experience and knowledge creates a solid basis for the future development of maintenance services in India. The cranes supplied by WMI are used especially within steel, engineering, general manufacturing, cement, energy, shipyard and logistics industries. The company has a strong position in the fast growing Indian steel industry in particular. WMI operates two production plants, one in Mumbai and one in Jejuri, near Pune, where it has recently invested in modern manufacturing technology.
For the year ended March 31, 2010, WMI’s net sales amounted to approx. EUR 30 million. WMI has a track record of strong sales growth. The company has an order book of more than EUR 50 million and its order intake prospects are good.
WMI employs approximately 350 people and additionally contracted workforce of about 600 persons.
Konecranes will acquire WMI’s shares in two phases. In the first phase Konecranes will acquire 51 percent of the shares for INR 1,690 million (EUR 28 million). In the second phase, approximately one year later, Konecranes will purchase the remaining 49 percent of the shares. The sellers are entitled to a performance linked part of the purchase price and the total maximum price for 100 percent of the shares in WMI can amount to approximately INR 3,600 million (EUR 60 million). The acquisition is irrevocable. The purchase will be financed with existing cash reserves.
”WMI boosts our presence significantly in the fast growing Indian crane market. Our aim is to further grow the business potential by extending the offering with technologies developed by Konecranes. The product offerings of the two companies complement each other very well. Furthermore, the acquisition of WMI adds India truly into our sourcing and supply network. Finally, WMI creates an excellent base for building our service business in India, in addition to our growing current service business, via its vast installed crane base.” says Pekka Lundmark, President and CEO of Konecranes.
“Joining the forces of WMI and Konecranes creates a new leader in the fast-growing Indian crane Industry. Our customers will benefit in terms of combined offering of products and technology of both companies and high-quality service. This will establish a solid foundation for the prosperous future.” says Gopal Vazirani, Managing Director and main owner of WMI.
WMI will be consolidated into Konecranes’ financial reporting once the regulatory approvals have been received. The approvals are expected to be received during the fourth quarter of 2010. The acquisition is expected to have an immaterial impact on Konecranes’ results in 2010.