Xtreme Manufacturing LLC is acquiring a 51% interest in the Snorkel telehandler business of Tanfield Group PLC, of Washington, England.

Xtreme proposes a staged acquisition of the operations and commits to provide working capital, possibly ranging from USD35 million to USD50 million, Tanfield says in a 29-page circular about the pending transaction.

Las Vegas-based Xtreme is creating a new entity, Snorkel International Holdings, "in which Tanfield will retain a holding until the consideration terms are fully met". Achieving the terms could reduce Tanfield's interest to 30% and increase Xtreme's ownership to 70%.

Tanfield reports its Snorkel division had a 2012 loss of GBP14.6 million (USD23.6 million) and, at 31 December, net assets of GBP23.5 million (USD38 million). Tanfield acquired Snorkel on 30 July 2007.

Competitors of the Elwood, Kansas-based Snorkel business include Oshkosh Corp's access equipment segment with the JLG brand; Terex Corp's aerial work platforms segment with the Terex and Genie brands; Linamar Corp's Skyjack subsidiary Haulotte Group, with the Haulotte and BilJax brands; and Toyota Industries Corp subsidiary Aichi Corp.

Tanfield says Don F Ahern, as trustee of the DFA Separate Property Trust, owns 96.6% of Xtreme and 97% of Ahern Rentals Inc. Ahern is the rental company's chief executive officer and Xtreme's managing member.

"Xtreme is looking at international markets with a view to further expand its footprint," Tanfield's circular says. "Ahern purchases a significant number of aerial work platforms annually and was, until recently, one of the Snorkel division's largest global customers. However, concerns over the Snorkel division's working capital position and, accordingly, its ability to meet Ahern's order and delivery requirements, had resulted in a suspension of this relationship."

Ahern founded Xtreme Manufacturing in 2003, initially making the XRM945 telehandler and subsequently adding new models. Xtreme now has a line of 15 models, ranging from the XR5919 compact boom telehandler to the XR4030 Xtreme capacity roller boom telehandler.

Xtreme designs, fabricates and assembles telescopic material handlers in the US. Company headquarters in Las Vegas house the engineering, fabrication and assembly department team leaders.

Ahern Rentals has 75 branches in 22 US states.

Tanfield anticipates key Snorkel leaders will continue with the telehandler business.

"On closing, it is proposed Darren Kell, Charles Brooks and Brendan Campbell will all enter into new employment agreements with Snorkel International Holdings," Tanfield says. Each will need to settle existing employment rights with Tanfield and resign as a Tanfield director.

In addition to its 49% interest in Snorkel International Holdings, Tanfield will continue to hold a 24% interest in Smith Electric Vehicles Corp, of Kansas City, Missouri. Smith manufactures electric commercial vehicles and battery-powered vans and trucks. Before a 2011 ownership change, Smith operated as a Tanfield subsidiary.

Ahead of a Tanfield general meeting on 7 October, the company said: "Following a consultation with its major shareholders in February 2013, the [Tanfield] board agreed to examine the potential disposal of the Snorkel division to reduce Tanfield's exposure to the Snorkel division's ongoing working capital requirements and thereby help protect its investment in Smith Electric Vehicles."