The Tanfield Group plc (Tanfield) has sold a 49% stake in Snorkel, a manufacturer of self-propelled aerial work platforms, to a new company controlled by Xtreme Manufacturing LLC (Xtreme) for US$80 million.
Snorkel has manufacturing facilities across the globe and supplies a range of cherry-pickers used in building, construction and infrastructure projects.
Xtreme is a manufacturer of telescopic material handlers, under the control of Don Ahern. Mr Ahern owns Ahern Rentals, Inc., one of the largest privately held equipment rental companies in the world and a long-standing customer of Snorkel. Xtreme has committed working capital facilities of up to US$50 million to support Snorkel’s growth plans and Tanfield will retain a 49% interest in Snorkel along with a preferred interest position of US$50 million.
In early 2013, the Board of Tanfield took the decision to appoint Cavendish to help find a purchaser for Snorkel. Following the global economic downturn in 2008, Snorkel suffered a catastrophic collapse in its market. In the four years ended 31 December 2012, the cumulative losses of Snorkel were circa US$80 million. For the first six months of 2013 Snorkel suffered further losses of over US$13 million. Market demand has now improved but Snorkel has continued to struggle due to working capital constraints.
Oaklins Cavendish, based in the UK, advised the seller in this transaction.
Jon Pither, Chairman of Tanfield, said: “Tanfield was unable to support the working capital requirements of Snorkel. The Oaklins' team examined a wide range of options and engaged with a significant number of companies from across the globe. Given the requirement for a significant working capital injection, it became clear that the Ahern deal presented the best option for delivering long-term value to Tanfield’s shareholders."
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