Spinoff of the multiline foodservice equipment business could be complete by the first quarter of 2016.
The Manitowoc Company’s Board of Directors has approved a plan to pursue a separation of the company's cranes and foodservice businesses into two independent, publicly traded companies. The company currently anticipates effecting the separation through a tax-free spin-off of the foodservice business, which it expects to complete in the first quarter of 2016.
Manitowoc’s multi-line commercial foodservice equipment business reported annual revenue of $1.6 billion in the 12-month period ending December 31, 2014. Its product lines include equipment in the ice, beverage, refrigeration, food prep and cooking segments of the foodservice equipment industry.
Late last year, shareholder Carl Ichan, Manitowoc’s third largest investor according to published reports, said he felt the company’s shares were undervalued and said he would discuss splitting the Wisconsin-based firm into two separate entities with its Board of Directors. Ichan was not the first investor, though, to make such a suggestion. Earlier in 2014, Relational Investors, Manitowoc’s second largest investor, floated a similar idea.
As the company pursues this separation, Manitowoc plans to follow through with its stated strategy and capital allocation plans. As a result, Manitowoc expects each independent company to have a capital structure and credit rating consistent with that of Manitowoc today. Manitowoc plans to report additional information on structure, management, governance and other matters related to the separation at a later date. In addition, this separation is subject to the customary regulatory approvals.
In April of 2008, Manitowoc, which then had its cranes and ice machine business, announced the acquisition of the Enodis Companies, which included such brands as Garland, Cleveland, Lincoln, Merrychef, Frymaster, Delfield, Kolpak, Scotsman and Ice-O-Matic. The deal was valued at roughly $2 billion. To gain governmental approval for the deal, Manitowoc was required to sell Ice-O-Matic and Scotsman, which it did, to investment firm Warburg Pincus in May of 2009. Warburg Pincus eventually sold Ice-O-Matic and Scotsman to their current owners, The Ali Group, in November 2012.