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Grove Worldwide is sold

March 20, 2002|BY RICHARD F. BELISLE

Grove Worldwide's main manufacturing plant in Shady Grove will continue to make cranes under its familiar trademark despite an announcement Tuesday that the company was sold to Manitowoc Co. Inc., a Manitowoc official said.

Wisconsin-based Manitowoc will pay $270 million for Grove.

That is $335 million less than Keystone Inc., a Fort Worth, Texas, investment company, paid for the giant crane maker in 1998.

Employment at Shady Grove dropped from 2,500 in 1998 - when it was Franklin County, Pa.'s largest employer - to the current work force of about 1,100 employees.

Grove filed for bankruptcy in May 2001. It emerged from Chapter 11 in September with its debt cut from $584 million to $205 million, thanks to a bailout by a banking group and bond holders.

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The bankruptcy agreement ended Keystone's ownership of Grove. The new owners, Grove Investors Inc., included the banking group and bond holders that got the company out of bankruptcy.

Manitowoc will finance the purchase of Grove with a combination of cash and 2 million shares of common stock based on current market prices. Manitowoc will assume or retire all of Grove's existing debt, according to a news release issued by the companies.

The deal is subject to approval by Grove shareholders. It will take two to three months to complete the transaction, officials said.

The sale to Manitowoc by Grove Investors Inc. includes the main manufacturing plant and corporate headquarters in Shady Grove, Grove's National Crane subsidiary in Waverly, Neb., and Grove manufacturing facilities in Europe.

Glen E. Tellock, senior vice president and chief financial officer of Manitowoc, said the new owner will not close the Shady Grove plant. He said it was too soon to say if or how the sale would affect employees there.

"Grove has a very strong brand name. It won't be changed although the sign out front may say it's a division of Manitowoc," Tellock said in a telephone interview Tuesday.

"When we look at the acquisition and its track record, we see that Grove is a busy company with good management and good products. They certainly know how to build telescopic cranes better than we do," he said. "We're very excited about it."

Tellock said Grove came out of bankruptcy as a very strong company.

John McGeehan, vice president of human resources at Grove, said employees were heartened by news of the sale.

"They were very positive about it," McGeehan said.

Grove makes mobile hydraulic cranes, truck-mounted cranes and aerial work platforms. Manitowoc makes lattice-boom cranes. Potain, which Manitowoc bought last year, makes tower cranes.

Jeffry D. Bust, Grove chairman and chief executive officer, said in a prepared statement that the merger "aligns two great companies with highly complementary product lines. We believe this is a perfect fit. It brings the Manitowoc, Potain, Grove and National names together under one corporate entity serving all segments of the crane marketplace.

"We are excited about the future," Bust said in the release. "This is very positive for everyone involved, for our shareholders, distributors, customers, supply chain and most importantly our employees and the local community."

Bust said that in the last two years, Grove has put its burdensome debt behind, streamlined manufacturing operations, flattened the organizational structure and developed new and innovative products.

Terry D. Growcock, Manitowoc's president and chief executive officer, said in prepared remarks that the acquisition of Grove "confirms Manitowoc as the leading producer of lifting equipment worldwide."

Grove was founded in 1947 in a garage. John L. Grove, his brother, Dwight Grove, and Wayne A. Nicarry, their partner, started making farm wagons.

The first crane was sold in 1952. Today, Grove products are sold in 50 countries.

Grove was sold to Kidde Inc. in 1967. It was sold again in 1987 to Hanson Inc. as part of a $1.6 billion merger deal with Kidde.

Keystone paid Hanson $605 million for Grove in 1998.

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