Manitowoc Completes Divestiture - Analyst Blog

The Manitowoc Company Inc. (MTW) completed the divestiture of Kysor/Warren and Kysor/Warren de Mexico (“Kysor/Warren”) to Lennox International (LII). The divestiture, announced on December 15, 2010, fetched $138 million for Manitowoc.

Kysor/Warren is a leading producer of refrigerated display merchandisers and systems primarily for retail applications such as grocery stores, supermarkets and convenience stores.  This business was part of Manitowoc's Foodservice Equipment segment.

According to the company, the Kysor/Warren business was primarily focused on food retail, a different market category and was not in line with the company's focus on building the commercial food service equipment line. Manitowoc expects the divestiture to allow it to focus more on its core brands, improve operational efficiencies across its global footprint and drive organic growth opportunities.

Manitowoc plans to deploys $124 million from this divesture towards reducing its debt level.

This will help the company reduce its high debt-to-capitalization ratio. As of September 30, 2010, Manitowoc's debt-to-capitalization ratio marginally improved to 79.2% from 81.2% as of June 30, 2010. This is in line with management's focus on improving its balance sheet and its debt reduction goal of $200 million in fiscal 2010.

The Zacks Consensus Estimate for fourth-quarter 2010 is 3 cents per share. For fiscal years 2010 and 2011, the Zacks Consensus Estimates are a respective 8 cents per share and $9.61 cents per share.

The quantitative Zacks #3 Rank (short-term Hold rating) for the company indicates no clear directional pressure on the shares over the near term.

Based in Manitowoc, Wisconsin, Manitowoc is a multi-industry, capital goods manufacturer with over 100 manufacturing and service facilities in 26 countries. It is one of the world's largest providers of lifting equipment for the global construction industry.

It is also a leading manufacturer of commercial foodservice equipment serving the ice, beverage, refrigeration, food preparation and cooking needs of restaurants, convenience stores, hotels, healthcare and institutional applications.

 
LENNOX INTL INC (LII): Free Stock Analysis Report
 
MANITOWOC INC (MTW): Free Stock Analysis Report
 
Zacks Investment Research