Columbus McKinnon, a designer and manufacturer of material handling solutions, executed a definitive agreement to acquire Montratec, an automation solutions company that designs and develops automation and transport systems to interlink industrial production and logistics processes. Montratec provides its monorail transport systems for the electric vehicle, semiconductor, electronics, life sciences and aerospace industries, among others.
“Montratec is an ideal complement to our precision conveyance platform, adding asynchronous technology for material transport solutions that accelerates our growth in very attractive markets with strong secular tailwinds,” David J. Wilson, president and CEO of Columbus McKinnon, said. “Montratec’s solutions are at the heart of process automation in manufacturing, enhancing our precision conveying platform. Their technology advances our intelligent motion offering, expands market access and increases our value proposition. We plan to realize significant sales synergies as we leverage their conveying technology through our existing channels in the U.S. and their solid foundation in Europe to expand our global precision conveyance market share.”
“This acquisition is an excellent demonstration of our strategy to drive growth with stronger earnings power and further catalyzes the transformation of Columbus McKinnon as a leading intelligent motion solutions provider for material handling.”
With approximately $29 million in revenue and 24% adjusted EBITDA margins in the calendar year ended Dec. 31, 2022, Montratec is expected to grow revenue by more than 30% in 2023.
The all-cash transaction is valued at approximately $110 million at closing using current exchange rates plus an earnout in an amount expected not to exceed $14 million based on EBITDA performance. The transaction is expected to close by May 31, subject to customary closing conditions. The purchase price represents 13 times 2023 expected adjusted EBITDA without synergies and 11.4 times with projected synergies. Sources of cash to fund the acquisition are expected to include expanding Columbus McKinnon’s existing revolver from $100 million to $175 million as well as securitizing $50 million in accounts receivable. Columbus McKinnon expects its net leverage ratio on a financial covenant basis of 2.2 times at March 31 will move to 2.7 times following the closing of the acquisition
“Our measurable cash generation, flexible balance sheet and strong liquidity enable us to finance this bolt-on acquisition at a reasonable cost in today’s credit environment. Importantly, post-acquisition, our leverage ratio is comfortably below three times, and we expect we will demonstrate yet again our ability to quickly de-lever to our targeted leverage ratio,” Greg Rustowicz, executive vice president and CFO of Columbus McKinnon, said.
