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Hyster-Yale completes Maximal purchase

Wednesday, 6 Jun 2018 ( #875 )
News Story
Hyster-Yale Materials Handling has completed its acquisition of 75% of the outstanding shares of, and a controlling interest in, Zhejiang Maximal Forklift Co., Ltd.

The purchase price of USD90 million was funded using Hyster-Yale's cash on hand.  

As a result of the acquisition, Zhejiang Maximal Forklift Co., Ltd. has been renamed Hyster-Yale Maximal Forklift (Zhejiang) Co., Ltd.

Current Maximal management has retained the remaining 25% interest in the new entity.

As previously reported, the transaction is a strategic action that is expected to expand the company's low-cost, global manufacturing capabilities, develop access to competitive component sourcing, further strengthen Hyster-Yale's utility and standard product portfolio by adding a wider spectrum of products to an already leading global materials handling business, and enhance the company's presence in the growing global utility and standard market segments, as well as in the China market.  

In its local statutory reports, Maximal reported revenues of RMB528 million (USD77 million) and generated an approximate 4% operating profit margin on combined domestic and export volume of nearly 7,000 units for the year ended December 31, 2017.  

Due to the investments that Hyster-Yale intends to make in the joint venture, the proposed acquisition, while currently profitable, is expected to be dilutive to the company's earnings over the next year by USD5 million to USD10 million pre-tax due to additional investments in expense and capital needed to implement an integration plan. In addition to these expenditures and investments, a one-time incentive-based payment of up to USD10 million may become payable by the third anniversary of the closing, upon the satisfaction of certain performance conditions. The acquisition is expected to contribute positively to Hyster-Yale's earnings during 2020 under conservative marketshare and synergy objectives.

HY Maximal is now structured as a separate legal entity, with its own management team led by Lu JinHong, and its own board of directors led by Colin Wilson, president and chief executive officer of Hyster-Yale Group, as chairman.  However, HY Maximal will be managed as a division of Hyster-Yale’s JAPIC segment, reporting to JAPIC senior management, and its results will be consolidated within the Lift Truck JAPIC segment financials.
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