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Terex (TEX) Sells Remaining Shares in Konecranes for $224M

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Terex Corporation (TEX - Free Report) has sold its remaining 5.15 million of Class A shares in Konecranes plc. This represents around 6.5% of the total shares outstanding of Konecranes and the total proceeds from the sale are around $224 million.  
 
Terex had received 19.6 million newly issued class B shares representing 25% interest in Konecranes following the completion of the sale of its Material Handling & Port Solutions (MHPS) segment to the latter in January 2017. Further, the company had received approximately $835 million in cash. The sale was in sync with efforts to simplify structure, systems and footprint in a bid to improve efficiency and enhance global competitiveness.
 
On Feb 15, 2017, Terex sold approximately 7.5 million Konecranes shares for proceeds of approximately $272 million and recorded a loss on sale of $13.2 million in the first quarter. Subsequently on May 23, Terex sold 7 million shares for approximately $277 million and recorded a net gain on sale of $7.6 million in the second quarter.
 
The sale of the remaining 5.15 million of the Class A shares of Konecranes had been priced at EUR 36.50 ($43.57), a discount of 1.7% to the closing price on Sep 5. The shares concerned include both Class A and Class B Konecranes shares but does not include Konecranes treasury shares. In total, Terex has received approximately $773 million for the sale of the 19.6 million shares of Konecranes. This brings the total consideration received by Terex for the disposition of MHPS to approximately $1.6 billion.
 
Terex remains committed to focus on three core segments and continues to simplify structure, implementing cost-restructuring plans. The company concluded the sale of its loader backhoe business in the U.K. and India. It further simplified manufacturing footprint by completing the closure of its Cranes facility in Jinan, China. In Germany, Terex signed a contract to divest its manufacturing location in Bierbach and reached an agreement with the Works Council, which provides flexibility to implement the remainder of the Cranes Germany restructuring program.
 
The North American market for Aerial Work Platforms segment’s equipment is improving. Cranes returned to profitability in the second quarter, led by the benefits from restructuring action and the company expects this trend to continue. However, the global crane market will likely remain challenging through the rest of the year.  Its Materials Processing segment is also progressing well.
 


In the past year, Terex has outperformed the industry. The company’s shares have surged 52.9%, ahead of the industry’s gain of 40.5%.
 
Terex currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
 
Other top-ranked stocks in the industrial product space include Caterpillar Inc. (CAT - Free Report) , AGCO Corporation (AGCO - Free Report) and Komatsu Ltd. (KMTUY - Free Report) . All three stocks flaunt a Zacks Rank #1. 
 
Caterpillar has expected long-term earnings growth rate of 9.5%.
 
AGCO has expected long-term earnings growth rate of 13.5%.
 
Komatsu has expected long-term earnings growth rate of 12.7%.
 
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