News story

Konecranes buys Morris USA

Thursday, 25 May 2006 ( #261 ) - HYVINKÄÄ, Finland
KCI Konecranes will reunite UK-based Morris Material Handling with its previous owner through the acquisition of a majority shareholding in MMH Holdings Inc, in the US (MMH).

The Morris UK business was sold to management in 1999 and acquired by Konecranes in 2005 ( News #191).

MMH filed for bankruptcy protection in 2000 but has since bounced back. Annual sales for fiscal 2005 were about USD170 million. In the first half of fiscal 2006 sales were USD102 million and operating profit was USD5.5 million, Konecranes said in a statement.

Konecranes' US subsidiary HHM Acquisition bought 59.2 per cent of MMH last week. "Due to the nature of the transaction it has not been possible to conduct a due diligence investigation of the target company," Konecranes said.

"However, based on knowledge of the crane and crane maintenance industries, the company has no reason to believe MMH's general business and financial risk profile would materially deviate from what is typical in the US in this field."

In 2003, MMH sued Konecranes for violation of intellectual property rights and unfair competition. MMH alleged Konecranes and its affiliates misused the P&H trademark licensed to MMH, and passed off non-P&H aftermarket parts as genuine P&H parts ( News #130).

A Konecranes spokesperson said a court decision was likely in the third quarter of 2006.

"The company does not, at the moment, have reason to expect the case to have a material effect and the acquisition of shares in MMH is not related to the legal disputes," she said.

She said Konecranes intended to acquire additional MMH shares because MMH was an established player in the crane industry with a long trading history in the North American market.
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