24.07.2013
Tanfield/Snorkel update
Tanfield has issued a statement saying that a number of potential acquirers are conducting due diligence for the purchase of Snorkel.
The actual statement says: “The proposed sale process of the Snorkel Aerial Work Platform division is on-going, with a number of potential acquirers proceeding through due diligence and the negotiation of a Sale and Purchase Agreement. We continue to be supported by our M&A advisor, and the timescale is being managed in the most practicable manner.”
In the meantime it confirms that the business is currently being managed to conserve cash through the Mergers & Acquisition process. And adds: “It has not been able to fully respond to the opportunities in the market. However, those opportunities remain strong driven by the on-going recovery in the sector. Snorkel's product range, brand and reputation continue to generate strong demand in the market and the board believes this to be of major importance to the engaged potential buyers.”
Vertikal Comment
This statement looks like it is lowering shareholder expectations regarding the current trading period, and also looks as though it is intended to keep interest ‘bubbling’ for the sale of the business.
The current market is mixed, with the larger companies continuing to do well along with the slightly more specialised suppliers. The market is not yet buoyant enough though to give the smaller full range producers a significant boost, especially those that relay on Europe for a significant part of their revenues.
The problem for Snorkel is that if this process drags on too much longer it will become increasingly difficult to obtain anything like a reasonable price for the business, as customers and suppliers begin to lose faith.
Hoogi
I sincerely hope that Snorkel falls into the hands of someone who can make a better fist of things than Tanfield Group have. Having previously bought UpRight and merged it with Snorkel, they had the makings of a serious contender in the platforms marketplace, but seem to have got it horribly wrong. It seems a long time since they reported any seriously large orders, and it sounds like they no longer have enough money to make any further progress at all. Back in February when first announcing that potential bidders (vultures??) were circling, Tanfield talked of interest being shown by someone wanting to enter the platforms market - implying that the likeliest buyer was someone not already involved with platforms.