11.01.2011

Cramo moves into Germany

Finnish based international rental company Cramo has acquired Theisen Baumaschinen, giving it new locations in Germany, Austria, Switzerland and Hungary

Cramo is paying around €85 million for all of the outstanding shares in Thiesen from its owner Arrex Beteiligungs-GmbH, a privately held company.

The purchase price comprises €40 million in cash, plus new shares in Cramo with a value of around €7 million. Cramo will also assume Theisen’s existing net interest-bearing debt and financial leasing liabilities of around €38 million, resulting in an actual purchase price/ enterprise value of approximately €85 million.

Cramo will use its existing long-term credit facilities to finance the transaction.
The number of new Cramo shares to be issued will be determined based by the weighted average stock exchange price for the 15 consecutive exchange trading days starting five exchange trading days following the signing of the agreement.

Theisen claims to be one of the top three rental businesses in Germany with a mixed rental fleet of construction machinery, access equipment, telehandlers and tools. In addition to rental the company has a small equipment trading operation.

Around 90 percent of its revenues are generated in Germany, where Theisen has a national presence with 90 depots. It also has nine depots in Austria, three in Switzerland and one in Hungary and employs a total of 274.
In 2009, Theisen generated revenues of €85.7 million and had earnings before interest and tax of €3 million.

The deal is expected to be earnings neutral for Cramo in its first year and then positive thereafter.

Cramo president Vesa Koivula said: “Through the acquisition of Theisen, Cramo strengthens its leading market position in the European equipment rental market. Theisen is an ideal complement to our current business operations not only from a geographic, but also from a product, service and customer perspective.”
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Alexander Renner of Thiesen and Vesa Koivula of Cramo on completion of the deal

“Theisen’s wide depot coverage provides us good opportunities to introduce new products, services and concepts to its existing customers, while also better opportunities to serve new customers in the European markets. We also think that the timing is right for the transaction, as we are already seeing economic recovery in Theisen’s markets after the recession.”

Koivula will be appointed as an interim managing director of Theisen, while its current managing director Alexander Renner will remain with the business as a senior consultant. The deal is expected to complete by the end of this month.

Vertikal Comment

This could make or break Cramo which has been struggling somewhat in comparison to some of its closest competitors. The deal should place it firmly in the number two slot in terms of Europe’s largest rental companies close behind Loxam and just ahead of fellow Finn Ramirent.

The German rental market is still relatively small with market penetration well behind countries such as the UK, Holland, Sweden, Finland France and Spain. It is also very fragmented, particularly when it comes to specialist equipment such as access.

The German market can be a tough one for incomers and acquiring a leading player is not guaranteed to make it any easier. It is without question a bold move, but with good timing in terms of the economic cycle. The ball is now firmly in Cramo’s court.