26.04.2006

Tanfield Buys UpRight

The Tanfield Group, owner of Aerial Lift, has announced the acquisition of the powered access business of UpRight International Manufacturing Ltd.

A full release will be made to the stock market within the next half hour.

The deal includes the take over by Tanfield of UpRight’s distribution operations in the USA and Japan. In these markets Tanfield will retain distribution rights for the UpRight alloy scaffold towers.

The deal is valued at €10.5 million in cash, with Tanfield taking on just over 60 employees at the Dublin location who are involved with powered access production. Revenues for the business last year were in the region of $50 million.

Production of the UpRight range will remain in Dublin for the foreseeable future, while the two companies evaluate the possibility for Tanfield to take on part of the facility. The deal is subject to a 30 day consultation period.

The Dublin plant would lend itself to being divided between UpRight which will now focus all its efforts on the alloy tower business and Tanfield for the powered access.

Roy Stanley, chief executive of Tanfield, said
'I am delighted to announce the acquisition of UpRight, which represents a considerable step change in the scale and range of our aerial access offering.

It will make us a truly global player in the powered access industry and offers opportunities for the global distribution of our other Group products. The transaction follows in our successful acquisition strategy of identifying quality, complimentary products to our existing offering which are not being properly capitalized on by their current owners.

We expect this deal to result in a strong uplift in profitability and to be earnings enhancing on a two-year view.

It has been a complicated transaction to complete and I would like to thank our shareholders for their continued support of Tanfield.'

Noel Corcoran, managing director of Upright, said: “The separation of the two entities in this way will allow each party to specialise in one arena. In both cases, this will significantly increase the level of investment and support available for each product range and brand.”



Darren Kell, business development director for The Tanfield Group, said: “UpRight has a comprehensive range of quality products, distributed globally through a professional dealer network.”

“Tanfield’s existing Aerial Access range of trailer and truck mounts will be a great fit with UpRight’s product portfolio of scissor lifts and self propelled booms.

“This means we can now offer clients a total powered access solution. From a production perspective, there are also obvious economies of scale and cost savings in terms of production synergies, shared components and having one design and management team.”

“We have a shared destiny, in that many of our UpRight powered access customers are UpRight ATS customers,” added Kell. “We see this as the foundation for what we are confident will be a long and fruitful partnership.”

Vertikal Comment.

Regardless of whether you think that this a good deal, a bad deal or of no consequence, the fact that it ends a long period of uncertainty regarding the remaining UpRight product range will be welcome news to many employees, distributors and suppliers.

In spite of a volatile two year period, which has included plant relocations, closures and product line rationalisation, UpRight continue to sell a surprising number of lifts over a wide international market. While not what it was, it retains a strong brand awareness.

Tanfield entered the aerial lift business with its acquisition of Aerial Access. The group has revitalised Aerial and surprised many observers by its appetite for the powered access business.

Tanfield could well be the tonic that UpRight needs. However untangling it from the successful Alloy Scaffold tower business will not be an easy task. Maintaining production at the Dublin plant makes very good sesnse.

Bearing in mind that most acquisitions fail miserably and that complex ones do less well, Tanfield will still have its hands full.

The company is certainly up for the challenge, its success or failure will depend almost entirely on how it deals with the people involved, its employees and its distributors. This is after all a people business.

All in all a very positive move.