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Manitex (MNTX) Divests Liftking Subsidiary to Pay Back Debt


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Manitex International, Inc. (MNTX - Snapshot Report) has sold its Liftking subsidiary for $14.0 million to focus on its higher margin core lifting businesses as well as cutting down debt. The net cash proceeds of approximately $13.3 million from the sale will be utilized to pay downs of its North American bank debt. Manitex shares gained 2.36% on the announcement.

Liftking has been scooped up by a newly formed subsidiary of Mi-Jack Products Inc. Based in Hazel Crest, IL, Mi-Jack is a privately held manufacturer and service provider for rubber and track mounted gantry cranes and industrial cranes catering to Intermodal and Industrial markets.

Liftking came under the Manitex umbrella following its acquisition in Nov 2006 for a consideration of $7.1 million. The trailing 12-month (TTM) revenue and EBITDA for Liftking were approximately $18 million and $2 million, respectively. In connection with the divestiture, Manitex will record in its third-quarter results certain allocated non-cash charges for goodwill and intangible assets. This will be in relation to the disposal of a portion of its Lifting segment, and an impairment of its investment in Lift Ventures, a joint venture Company that distributes certain remaining inventory of former Liftking and former Load King products. These charges are expected to be in approximate ranges of $6.5-$7.0 million and $5.5-$6.0 million, respectively.



The divestiture is in alignment with Manitex’s corporate program that focuses its resources on higher margin core lifting businesses and to reduce its indebtedness. These remain the company’s top corporate priorities for this year and the next. Manitex during its second-quarter conference call had stated that sales of non-strategic businesses combined with other incremental working capital and operating cash flow, may enable the company to exceed its previously stated target of $45 million in debt reduction for calendar year 2016.

As the company operates in cyclical businesses and the timing of the recovery is impossible to predict. Though Manitex remains confident that the measures implemented to rationalize production, lower costs, strengthening balance sheet, and enhancing presence in its served markets will lead to future growth.

Manitex currently carries a Zacks Rank #3 (Hold).

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