After protracted and difficult negotiations, Terex Corp seems to be going ahead with its takeover of Fantuzzi Group, but on different terms to those previously agreed
A deal worth around €215M was first announced last August, but in December Terex notified the US Securities & Exchange Commission that it would terminate the acquisition due to an alleged “material adverse change in the Fantuzzi business.”
Fantuzzi Industries disputed the termination and initiated arbitration proceedings against Terex in Italy. However, the parties, together with the lenders to the Fantuzzi and Noell businesses, continued to be engaged in discussions to resolve the matter.
Terex and Fantuzzi issued identical official statements on 1 April, stating that they have agreed on a term sheet for the acquisition by Terex of the port equipment businesses of Fantuzzi Industries Srl and Noell Crane for a net consideration of around €175M.
Term sheets have also been agreed with the existing financial creditors to the Fantuzzi group for long-term financing on favourable terms to provide substantially all of the funds necessary to complete the transaction.
The non-binding term sheets set the guidelines to complete the transaction and it is the intention of the parties to work to enter into agreements and complete the transaction within the next few weeks.
“Closing of this transaction will permit the successful completion of the restructuring of the group, said Fantuzzi group’s chairman Luciano Fantuzzi. “The Fantuzzi and Noell businesses will enjoy all the benefits of being part of a strong industrial group able to support them in the current challenging markets.”
“Immediately after closing we will begin to work with Fantuzzi’s team members, suppliers, distributors, customers and other stakeholders to aggressively restructure and position these businesses for the eventual recovery in their markets,” said Rick Nichols, president of Terex Cranes.
Phil Widman, SVP and CFO added: “Upon completion of this transaction, our debt levels will increase modestly due to the financing provided from the existing financial creditors. With the long term maturities and expected company-wide cash flow generation, we believe liquidity should be sufficient to get us through the economic downturn.”
